In the early morning of March 23, Nanjing "patched" the housing purchase restriction policy: if either spouse of a divorced couple purchases a house within 2 years, the number of housing units owned by them will be calculated based on the number of units owned by the family before the divorce.
As of now, Nanjing has become the seventh region to tighten control policies in the second half of the year. Previously, sales were booming, and there were many cities where real estate projects were sold by thousands of people. Faced with the hot market, local governments had to step up their efforts.
In the opinion of industry insiders, the regulatory and tightening policies are mainly focused on combating "fake divorce, fake settlement, and fake talents," but the policy is moderate and may be effective in cooling the market in the short term. In the long term, regulation should focus on tightening credit, reducing arbitrage space, and increasing supply.
Regulation targets “fake divorce, fake settlement, and fake talents”
Starting from July, the country has ushered in a wave of tightening of control policies. As a hot city with rising housing prices, Nanjing is the seventh region to tighten regulatory policies recently.
On July 2, Hangzhou issued a new policy for the real estate market, proposing that talents will be given priority in lottery to purchase houses, and they will not be allowed to be listed for trading within 5 years from the date of online signing. On July 6, Ningbo upgraded its property market regulation and expanded the scope of purchase restrictions. On July 13, Zhengzhou launched a special inspection on the order of the real estate market, which included selling more than one house, holding back on sales, returning sales, and after-sales leasing, etc. On July 14, Inner Mongolia adjusted policies related to housing provident fund loans and stopped issuing provident fund loans to buyers of third homes or above.
Since the second half of July, regulatory policies have become more targeted. On July 15, Shenzhen required newly settled residents to have completed three years and paid social security for 36 consecutive months before they could buy a house. On July 15, Dongguan improved the transparency of housing prices, reasonably guided market expectations, and regularly released online housing prices to improve housing transparency. On July 23, Nanjing proposed that if either party of a divorced couple purchases a house within two years, the number of houses owned by them will be calculated based on the number of houses owned by the family before the divorce.
As we all know, in the first half of this year, due to the impact of the epidemic, property market policies were mainly loose, and talent policies of various strengths were frequently released across the country. According to statistics from Centaline Real Estate, as of a few days ago, more than 120 cities across the country have issued talent policies in 2020, of which house purchase subsidies and settlement policies have become the main features.
Subsequently, the market as a whole gradually recovered from the impact of the epidemic. In May and June, housing prices in many places increased significantly, and investment demand increased. Under this circumstance, in July, places including Hangzhou, Zhengzhou, Inner Mongolia, Shenzhen and other places successively issued tightening control policies on real estate.
In this regard, Zhang Dawei, chief analyst of Centaline Real Estate, analyzed that in July, regulatory policies began to tighten in cities where housing prices increased significantly. The content of the policy is different from the past, mainly focusing on cracking down on three fakes: "fake divorce, fake settlement, and fake talents."
Zhang Dawei predicts that with the emergence of a new round of regulation, more than 15 cities may issue tightening policies of varying intensity. It is expected that cities such as Chengdu are very likely to increase controls in the future. The reason is that, in addition to the "10,000-person lottery" projects that have appeared in Hangzhou, Shenzhen, and Nanjing, there are 6 real estate projects in Chengdu with more than 10,000 applicants. For the typical Kaide Zhuojin Wandai project in Longquanyi District, the number of applicants There were 22,806 people competing for 194 houses, with a comprehensive winning probability of only 0.85.
It is worth noting that due to the overheating of some markets, on July 20, the China Banking and Insurance Regulatory Commission held a mid-year work symposium and emphasized that it is necessary to resolutely prevent the resurgence of shadow banking, the resurgence of real estate loan chaos and blind expansion. Extensive management is back with a vengeance. From this point of view, the regulatory policies have become tighter day by day.
Regulation and tightening of urban housing prices are rising rapidly and supply and demand are imbalanced
The 100-city price index released by the China Index Research Institute in June showed that the price of new homes in Ningbo, Shanghai, Hangzhou, and Nanjing increased significantly month-on-month. , ranking among the top four. Among them, the price of new houses in Ningbo increased by 1.33 month-on-month and 8.18 year-on-year.
Gao Yuansheng, executive deputy general manager of the Enterprise Division of the China Index Research Institute, said that the rapid rise in housing prices in the above-mentioned cities was the reason for the introduction of regulatory policies. In recent years, price limit policies have led to an inversion in the prices of first- and second-hand houses in these cities. Many people feel that they are making money by buying a new house.
The high school student further explained that this round of popularity is not necessarily the result of investors entering the market, but is also related to the relatively strong urban demand and insufficient supply. In the first half of this year, with the resumption of work and production, the overall performance of the Yangtze River Delta market represented by Nanjing, Hangzhou, and Ningbo was relatively good. However, the supply of new homes in these cities was obviously insufficient in the first half of the year. From the perspective of short-term inventory, Ningbo was 5.7 months, Nanjing was 6.3 months, and Hangzhou was 5.8 months. In contrast, the short-term inventory in Beijing and Fuzhou is more than 25 months.
Zhang Dawei also believes that there is an obvious phenomenon of price inversion in regulated cities. In some hot real estate projects, tens of thousands of people participated in the lottery for hundreds of suites. And "thousands of people shake" has also become synonymous with measuring the popularity of the property market in the first half of the year. Because they see that the price of new houses is significantly lower than that of second-hand houses, some investors purchase houses through fake divorces, fake talents, fake settlements, etc.
In the view of Zou Linhua, leader of the housing big data project team of the Institute of Financial Strategy of the Chinese Academy of Social Sciences, under the loose monetary environment, market credit interest rates have dropped rapidly, the difficulty of loans has dropped significantly, and a large amount of low-cost credit has Funds want to find a way out in the capital market. In the context of great uncertainty in the global economic outlook, these funds generally choose cities with large market capacity, relatively safe funds, and less stringent purchase restrictions. Among them, in some cities with relatively loose regulatory policies, some investors have avoided purchase restrictions through talent introduction, settlement and other means.
Industry: Tightening regulatory policies will be effective in cooling the market in the short term
In fact, what the market is most concerned about is, what impact will tightening regulatory policies have on the market?
In Zhang Dawei’s view, the areas where regulatory policies were upgraded in the second half of the year did not play a fundamental role in curing the problem. They were basically fine-tuning policies such as purchase restrictions, price limits, and pre-sales. It is expected that the short-term impact on the market may be effective, but the medium- and long-term effects will not be very good.
High school students also believe that the local government just wants to cool down and does not mean to completely cool down the property market, so the policy is relatively mild. This round of regulatory policies has a certain guiding effect on the market, that is, it insists on "housing is for living, not for speculation." Therefore, market demand is difficult to be suppressed by existing policies, unless it is killed with one shot.
The Gao Yuan student further explained that market trends still depend on the supply and demand relationship in the market. Now local governments are also interested in increasing supply, but it is difficult to change the status quo in the short term, which requires a long process. In the face of a hot market, local governments have to step up their efforts. Because it relies solely on market adjustment, the cycle is too long and the effect is not particularly obvious, requiring short-term policy pressure. Overall, these regulatory policies can stabilize the market.
"Policies that have a greater impact on the market should tighten credit, reduce arbitrage space, and increase supply. If regulation does not crack down on arbitrage space, it will be difficult to be effective." Zhang Dawei said.
Zou Linhua believes that in a short period of time, purchase restrictions can be upgraded to cope with the influx of investment demand, but too strict purchase restrictions will create obstacles to the flow of talents and factors. Due to the imbalance of regional development, not all cities are applicable to long-term and strict purchase restriction policies.
Zou Linhua pointed out that due to the abundant funds in the credit market and mortgage loan interest rates lower than the mortgage loan interest rates, the actual effect of the loan restriction policy is not obvious, and the policy framework for purchase restriction and loan restriction is no longer complete. In the context of loan restrictions and reduced efficiency, it is necessary to reconstruct the housing control system that has been in place for ten years with purchase restrictions and loan restrictions.