Chinese media gets the property memo

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Cross-posted from Investing in Chinese Stocks.

Some people got the memo about boosting confidence in the housing market and and some even added extra pieces of flair. Midland Realty National Research Center, for instance, says first-tier city home prices will jump 15-20% in Q2.

Midland National Research Center property that the “3.30” New Deal after landing, the property market volume and price trends are rising, the number of buyers into the market panic related, but this fear will slowly disappear. Meanwhile, the hot line and second-tier cities, it is expected to appear more significant growth, after pressure on the stock price drop more power developers. For inventory pressure three or four-tier cities, there is still the top priority to the inventory turnover is difficult to reverse in a short time, so housing prices need to take the amount of low-cost policy based.

However, the first-tier cities and some second-tier cities, for now, developers have not yet fully restored push plate, made it clear that if the prices were in the minority, the majority of real estate will build off of the case based on price and customer response to pricing But do not rule out the use of covert actions to reduce this discount prices.

According to the National Research Center Midland Property judge, “We expect the volume of the housing market in the second quarter, will rise by 15% -20% on the basis of the first quarter, the price will also usher in the first wave of 2015 rose period.”

Sales in Beijing have been strong though:

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According to Asian high statistics show Qingming small holiday period (April 4 to April 6th), Beijing city’s total turnover of 661 sets of commercial housing turnover total area of ​​63,000 square meters, compared with the same period last year, were up 222% and 167%; the average transaction price reached 25,792 yuan / square meter, an increase of 1%.

iFeng: 新政刺激下北京住宅成交量暴涨 房价将涨15%

Some people didn’t get the memo though. In a piece originally published in the China Economic Weekly, questions about the government’s housing rescue are raised. While industry insiders all see the government’s moves as positive, some question how long the effects will last. One project manager doesn’t expect a rebound similar to 2009, while a major realtor doesn’t expect the effects of the policy to last beyond Q2:

In the northeast, Yunnan and other places have the wealth of the Allied Group real estate project manager of real estate projects of Gao Wei told the “China Economic Weekly” reporter, although this policy efforts, but the market reaction may not be great, to be calm after the excitement. For some holders of “the market will usher in a wave of similar big rebound in 2009,” the view, Gao Wei does not agree. “Today’s market base compared with 2009, has changed so much. For example, in 2008 the sales price of an item outside of Beijing East Third Ring Road is 15,000 yuan / square meter, and that prices are likely to rebound, but today, Beijing East Third Ring Road project have risen to 60,000 yuan / square meter, there is no room for a rebound in the market.” he said.

…Gao Wei many places in the country where the company layout, but the current sales encountered some problems, especially in the four-tier cities, such as they took a one million square meters of the project in the northeast province, from 2010 to now, only developed the 300,000 square meters, and the property has been developed in this part of five years to sell less than 50%. “I have long noticed in Yunnan, across hundreds of residential homes, at night the lights are turned on in less than 10 of them, which is really very alarming.” He said.

Gao Wei further pointed out that the current property market is concerned, there are two core issues, namely the housing supply in some places is saturated; the second is demand is gone.

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But in Shenzhen, the transaction price jumped 10% following government measures:

But for some cities, after the New Deal, the property prices have changed immediately. According to media reports, some developers in Shenzhen in March 31 began to rise, and some rose as high as 10%, some take “price soon” in the name of promotion. Shenzhen Central Plains Research Center survey shows that in Shenzhen, second-hand housing market, the average price of second-hand from September 2014 of 30,233 yuan / square meter all the way up, after the New Deal has been to break 33,000 yuan / square meter. According to media reports, some real estate development company in Hangzhou, the new disc project day sales of one hundred million yuan.

我爱我家 I Love My Home’s vice president Hu JInghui is less optimistic despite a similarly strong pickup in Beijing:

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Nevertheless, Hu Jinghui, the market outlook is still not optimistic. He said: “Many colleagues say that real estate in the spring came, I think this is unlikely. The policy will stimulate trading volume in the second quarter……Under the current economic new normal, economic stimulus effect of real estate may last for two or three months. “

iFeng: 一线城市上涨动能不足 新政能刺激多久?

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.