Future housing price trends in 2017: Property market transactions in many hotspot cities are declining

Data recently released by the National Bureau of Statistics show that following October, the growth rate of national commercial housing sales area and sales amount fell again in November, and the real estate development prosperity index also showed a downward trend. Under rounds of regulation, the property markets in many hot cities have gradually returned to rationality.

The effects of property market regulation are beginning to show

Zhang Yuwei is a real estate consultant for a real estate agency in Hangzhou. On November 10, Hangzhou’s loan restriction policy was fully upgraded. Early that morning, he sent a group notice to his clients policy measures. "House prices will definitely fall after the policy comes out, and we are going to drink from the northwest wind." After experiencing the madness of the property market in September, Zhang Yuwei understands what it means to increase regulation.

The just-released data for November shows that Hangzhou’s property market has experienced an unexpected sharp drop in transaction volume, with both the transaction volume and the average transaction price of the new home market declining. Among them, the transaction volume of newly built commercial residential buildings in Hangzhou dropped sharply by 54.9% month-on-month, and the average transaction price dropped by nearly 10% month-on-month.

According to statistics from the Transparent House Sales Research Institute, 13,000 new commercial housing units were sold in Hangzhou in November, down 36.2% month-on-month and 7.7% year-on-year. The total transaction area was 1.289 million square meters and the total amount was 2.013 million yuan. billion. Among them, 6,300 new commercial residential units were sold, a decrease of 54.9% month-on-month and a year-on-year decrease of 42.5%.

Statistical data shows that the average transaction price of new commercial housing in Hangzhou in November was 15,498 yuan/square meter, a month-on-month decrease of 8.7%. Among them, the average transaction price of new commercial residential buildings was 15,175 yuan/square meter, a month-on-month decrease of 9.5%; the average transaction price of new commercial residential buildings in urban areas decreased by 6.2% month-on-month, the largest month-on-month decrease during the year.

Many real estate companies have already felt the market downturn and have secretly launched "late-market specials" during the year-end sprint. The real estate companies that have won the "land king" are even more miserable. A property in the Dinglan section in the north of Hangzhou has recently launched more than 30 small apartments, with an average price of 19,000 to 20,000 yuan/square meter. Previously, the average price of this property remained at 25,000 yuan/square meter. about. A new project in the Sandun section also opened for the first time in late November at a price lower than that of its surrounding areas. It was called the "first drop" in Hangzhou's property market this year by the industry.

Data from E-House Research Institute shows that in November, property market transactions in key cities across the country fell by more than 20% month-on-month. Transactions in first-tier cities fell across the board, with 10 out of 15 second-tier cities falling, of which Hangzhou, Suzhou and Nanjing all fell by more than 50%.

From the perspective of market prices, the phenomenon of substantial price reduction and de-bubbing of second-hand housing with inflated early prices has occurred in many places. Among them, second-hand housing prices in Shenzhen have dropped for two consecutive months, and second-hand housing prices in Nanjing have dropped for the first time in 19 months.

“There is a price only if there is a volume. Without transaction volume, the rise in prices will lose support.” Fang Zhangjie, director of the Transparent House Sales Research Institute, said that as the transaction volume of the property market continues to shrink, there will be no more support in the future. Government policies are needed to suppress it, and the market will lose the power to increase prices. The market is now in a passive downward adjustment stage, and developers will take the initiative to lower prices for a period of time.

From the time the signal was released before the National Day to the drop in volume and price in November, does it mean that the regulation of the property market has been put in place? In this regard, Fang Zhangjie believes that the market has returned to rationality, and developers and home buyers are The mentality has tended to be stable. According to the requirements of city-specific policies and one city-one policy, it is currently advisable to pay close attention to market changes and decide whether to increase controls based on fundamentals.

Hot money pours into commercial real estate

The overall heating up of Hangzhou’s real estate market has in turn heated up commercial real estate with high inventories. According to statistics from the Transparent Real Estate Sales Research Institute, the city's largest number of new commercial real estate transactions in November was 6,700 units, setting a new monthly record for commercial real estate transactions and a year-on-year increase of 112%. It is worth mentioning that in the sales ranking of new commercial housing in Hangzhou in November, the top five properties were all commercial or commercial and residential projects.

As early as March this year, Hangzhou’s commercial real estate transaction volume “jumped” following the residential market. In that month, 3,965 units were sold, setting a new high since 2015. Since then, commercial real estate transaction volume has continued to grow and has remained at a high level since exceeding 5,000 units in May.

From the perspective of transaction proportion, the proportion of commercial real estate transactions in newly built commercial housing in November increased by 20 percentage points compared with October, reaching 51%. Within the urban area, commercial real estate transactions accounted for 58.6%. For the main urban area alone, commercial real estate transactions accounted for 72%, an increase of about 20 percentage points from October. From the perspective of transaction types, houses with office properties (including office buildings and serviced apartments) are the main subjects of commercial real estate transactions in Hangzhou, among which serviced apartments perform particularly well.

The sales volume of the European and American Financial City located in Hangzhou Future Science and Technology City is expected to reach 2 billion this year, of which office buildings contribute more than half of the sales volume. "The annual plan has been overfulfilled, and the entire group has invested in the annual review." said the relevant person in charge of the Zhejiang Construction Real Estate Development Group.

Data show that under the background of purchase restrictions and loan restrictions in the urban residential market in Hangzhou, a considerable part of investment demand has overflowed into commercial real estate. This situation has already appeared in October, and the policy was upgraded in November. Later, the trend of commercial real estate going against the trend became more obvious.

“Hangzhou’s commercial real estate performance this year is expected to be satisfactory, but next year will be a big year for supply, and developers need to be fully prepared.” Ma Yingshu, managing director of CBRE Hangzhou, said that serviced apartment products When the market goes up, there may be a release, and the investment performance also appears, but whether it has higher investment value when the market goes down is questionable.

Looking back at history, after Hangzhou’s residential purchase restriction policy was upgraded in February 2011, the proportion of commercial real estate transactions also experienced rapid growth and has been running at a relatively high level of around 35% for nearly a year. In this round of regulation, the proportion of commercial real estate transactions exceeding normal levels is expected to continue for a long time.

(The above answers were published on 2016-12-19, please refer to the actual current relevant home purchase policies)

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