2014-08-09

Investors Hoping First Tier Cities Relax Restrictions

Buyers are hoping the first tier cities of Beijing, Shanghai, Shenzhen and Guangzhou will ease real estate buying restrictions, given that price drops in second and third-tier cities led to easing. One investor planning to buy existing homes in Beijing says he's been getting lots of calls to see properties, indicating sellers are growing in number.

There isn't a lot of new information in the article. At this point, the easing of restrictions in first-tier cities is unlikely, but it shows there are still die hard real estate investors ready to buy. Where policy has been eased, the results are mixed. As one person quoted in the article below said, in most places the rebound in sales is an "Indian Summer" that isn't expected to last.

一线城市松绑无望 二三线楼市降价致恐慌蔓延
According to sources, Foshan City building housing the Bureau from start Aug. 7 am, within the city of Foshan in the real estate market regulation policy adjustments related content improvement. So far, Foshan, Guangdong province has become the first city to announce the purchase of deregulation.

Shanghai E-House Real Estate Institute researcher Yan Yuejin told the " China Business "reporter, in fact, Foshan had relaxed voice is high, which has a relationship with the local structure of demand and inventory pressure. Foshan's foreign population are more part of the group has accumulated a relatively high ability to pay. Such groups in the purchase of the policy is very fragile, and often do not meet the conditions of purchase and can not enter the market. At present, by relaxing the restriction that such constraints get canceled, such groups can be good in the market actively.

Although the market for the purchase of the property line to cancel the voice gradually, but the first-tier cities are still untold relaxed. August 6, Shenzhen Urban Planning and Land Resources Committee issued "on the network spread Shenzhen will cancel the purchase of the note", indicating that housing will strictly enforce the restriction policy. Meanwhile, the industry also pointed out that the situation first-tier cities house shortage continues, should not relax the restriction.

In the first-line property firm "no relaxation", while second and third tier property prices led to panic and gradually spread, more and more buyers on the sidelines for the first-line property. "I want to wait and see, the past few months the real estate broker frequently call me Qukan Fang, indicating that more and more sellers. "Beijing ready to start buying a second-hand housing investors, said, "It is a buyer market, to see the situation in order to bargain with the sellers. "

Tier relaxed hopeless

According to the latest data show that as of August 6, the purchase of the country 47 cities, 17 cities have issued a document to confirm the cancellation of official restriction, including Hohhot, Jinan, Suzhou, Nanning, Haikou, Xi'an, Wuxi and Shijiazhuang. In addition, there are 11 cities still adhere to the restriction, including Shanghai, Beijing, Guangzhou, Shenzhen and Taizhou.

If the restriction is lifted bailout signal, then it is undeniable that a growing number of major cities revealed an urgent bailout wish. This year, the four first-tier cities have both been rising inventory, inventory to significantly longer period, from the past 12 months following the level rose to 13 months or more levels. Such cities also began to appear real estate unmarketable phenomenon. Therefore, the four first-tier cities of Guangzhou-Shenzhen northward, credit limit restriction deregulation policy can become the focus of policy and market level of attention.

In this regard, the relevant people in the industry said that this year, more than 15 cities nationwide have relaxed the restriction to second-tier cities based. However, the first-tier cities in the purchase, the policy is still strong. "Although Shanghai and Guangzhou also recently appeared locally rumors relax the restriction, but basically did not relax this year's first-tier cities may purchase. "Ya Ho agency Guo Yi, director of marketing, said in an interview with reporters.

Meanwhile, chief market analyst at Hopefluent Liwen Jiang also said that at least this year, first-tier cities may not relax the restriction.

"Especially in Beijing this year, do not have the basic conditions for relaxing or cancel the purchase of." Guo Yi said, "this year, seven months before the land revenue to more than 120 billion yuan, more than 2011 and 2012, that there was no pressure. In addition, the Beijing local fiscal revenue growth rate is maintained at more than ten percent, and the Beijing second-hand housing and the volume of new homes in July has been heating up, these three decided to open a small possibility this year. "

According to statistics, as of June 20, the Beijing property market inventory is 80,844 units, which is early 2013 Beijing property market after the stock fell below the 80,000 units, 80,000 units more than once again return, the highest in nearly 18-month high. And in April 2012, Beijing's inventory of 91,000 units. In other words, the current Beijing property market inventory is not high in the first half of 2012 to reach.

In this regard, the Secretary-General Chen Beijing Real Estate Association also believes that Beijing's housing market this year will not be worse than 2011. "In 2011, Beijing pure real estate transaction only 58,000 units, but this year is expected to grow to 75,000 over the first half of this year, Beijing purely commercial housing turnover 24,000 units, have been recorded this year, there are 30,000 sets of listing Self housing While owner-occupied real estate situation may appear abandoned election, but these products will eventually be digested if the second half of Beijing can maintain the same volume of commercial housing and the first half of this year, the overall market are good. "

According to data released in Beijing showed the first half of 2014, the Beijing local public budget revenue 218.25 billion yuan, an increase of 11.1%, more than half of the successful completion of the task. Deputy director of the Beijing Municipal Finance Bureau, said spokesman Han Jie, land revenue increase in 2013, and the land market better relationship. However, according to 2013 estimates, the Beijing government land revenue available budget only "three budget" (referring to government funds, public budgets, state-funded budget) overall 8%. "In other words, Beijing does not rely on revenue from land sales revenue." Guo Yi told reporters.

"For example, as of present, Shanghai new residential stock topped 11.5 million square meters, the highest since 2011 years of inventory purchased a new high, but the fact Shanghai less dependent on land finance, the main source of GDP for the financial and service industry, property inventory pressure is not sufficient to increase the financial pressure on the government. "Shanghai Real Estate Research a financial institution told reporters, therefore, for the first-tier cities, at least within this year, are not likely to relax the restriction.

In addition, Yan Yuejin also told reporters that the one-step relaxation approach is not realistic. Line the city's property market regulation policy can not easily be removed, otherwise easily lead to disorder in the property market. But based on the current property market periodically adjust the tempo, the timing of the first-tier cities are also fine-tune the policy matures.

"Therefore, based on reflection it appears that the policy is necessary to fine-tune the key is to control two things: First, the implementation of market-oriented principles, that is the difference of ideas, fiscal and financial means to regulate the second is to save and activate housing demand has been suppressed, the real ability to pay to be released, and accelerate the cycle property resources. "Yuejin Yan told reporters.

Meanwhile, Chen also believes that with the first half of the land market performance is not bad, but the Beijing tax data is also good, this means that the Beijing government will be timely and appropriate structural adjustments. "For example, one end of the dominance of the original house, will now turn to a more balanced or park on commercial real estate industry."

Downward pressure

Turnover stagnated, high inventory led to the government bailout eager. So, to cancel the purchase, whether the property market will pick up the possibility of it?

Pacific real estate securities industry analyst Zhou Jiong that the impact of the restriction policies vary for different cities. For some limited shopping affect the larger cities, the rebound will be larger after deregulation, whereas the impact is very small. Overall, the purchase of the property market deregulation on the overall volume will be much affected.

"With the purchase of local deregulation in some areas, there has been focus on short-term rise in net signed volume brings 'Indian summer', but with the bulk of digestion and relax the restriction did not bring a greater impact on the local property market." Of a financial institution who Shanghai told reporters that the current restriction has been relaxed in the city, the inventory cycle ranging from twelve to three months, it reached more than 37 months, the market pressure is more obvious. Integrated multiple restriction has been relaxed urban property transactions a month or more to see, not on the transaction play a significant stimulating effect.

"Take Foshan, the current inventory of new homes Foshan reached 6,000,000 square meters, which means that there are so many houses did not sell, do not digest all of a sudden the other hand, Foshan future development of new homes can also more, supply and demand determine the house is not a valuable commodity, developers and buyers are relatively rational. "Foshan City Real Estate Association, vice president Luo instrument grams analysis, therefore, to relax the restriction, property transactions and prices skyrocketing and will not appear situation.

Guo Yi told reporters after the restriction was relaxed first rise in trading volume, the inevitable result of the increase in trading volume caused by the price rise, but mainly affect expectations of buyers, expect the market upward, there will be a lot of people approach, however, Now the main downside is expected, there is a demand of people worried that prices fell so hold out. Overall, the purchase of deregulation on the overall volume will be much affected, because the current investment and speculative housing demand is still in the containment state.

At the same time, Beijing, a financial industry declined to be named, told reporters that the current situation, to cancel the purchase transaction on the market stimulation is not obvious, most still in the doldrums, only the individual expressly adjust the volume restriction city rebounded, but almost a short-term finished and then quickly dropped. "In other words, more than cancel the purchase of the policy has not yet received a strong effect."

It is worth noting that some market participants believe that, for now, the purchase will not change the overall downward trend of deregulation real estate market. Later this year, the risk of real estate assets still exist, second and third tier cities relaxed the restriction is not sufficient to reverse the current situation of the real estate market as a whole, the purchase in the first-tier cities deregulation under no circumstances may the real estate is still there under Shui signs, but next year or will be an important year.

However, there are many people in the industry said, from the current market, because of the economic slowdown or local government reliance on real estate increased significantly. In this context, local government intervention propulsion power increase over the bailout enthusiasm will continue to rise. Under the loan is expected to loose, showing part of the property or to pick up, but this approach or cause other cities to follow suit.

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