Cross-posted from Investing in Chinese Stocks.
A UBS report says home sales are being fueled by homeowners trading up, but only half of the inventory pressure has been relieved. Real estate investment will continue to lag as a result, from Ifeng:
UBS through the domestic 117 cities in 3334 to investigate consumer buyers will find that upgrading to improve the existing housing situation this year is the main reason for the big cities to pick up property sales. With a series of market regulation measures RRR cut interest rates, down payment ratio of buyers as well as a more flexible policy, provident fund loans in the past year have been released, had been suppressed housing demand has been partially released.
But China’s real estate industry analyst at UBS Securities Ding Xiao noted that, despite demand recovery, the property market as a whole to the inventory pressure is still great, especially the four-tier cities. In addition, income slowed and uncertain prospects for the real estate tax concerns and other factors will drag new commodity housing sales are expected to growth from the current 15% -19% by the end of 2016 slowed to 5 percent.
Some first tier cities are overheated, from Caixin:
Authorities in Shanghai have suspended the auction of a plot of premium residential land as the city government comes under pressure to rein in housing prices.
Chinese first tier cities are running out of prime land and they’re restricting land sales in order to drive up the prices, which has led to high premiums on fewer land sales. High premiums lead to higher costs, which are passed on in the form of higher home prices. Of course, if there’s less land developed, then the existing stock of homes are worth more. In a normal economy, the market sorts it out, but in China, government officials like to play policy pinball.
Others first tier cities appear to be cooling, from Ifeng:
In fact, Golden Week’s fading color is a microcosm of Gold September Silver October, as a whole, the traditional harvest season this year, Gold September Silver October faded a lot. In the off-season is not short silver era, many developers have “received over several crop grain”, “harvest” basic security, and the next to get to the more difficult situation, housing prices not in a hurry to ship. Facing jumping out of reach of luxury prices, people just need to buy a house do not worry.
Two-way supply and demand weak, so just past Golden Week, is not gold, nine silver ten gold fade significantly.
However, in the above senior real estate marketing view, so the phenomenon does not mean that the property market collapsed, and it is the new trend of the future of real estate marketing.
First-tier cities have served as leading indicators in the past and if the real estate upturn is slowing to a stall, it doesn’t bode well for the third- and fourth-tier cities looking for a miracle that so far is not coming, from Ifeng:
GF Securities believe that in September the national real estate market turnover of less fineness. 44 cities nationwide to monitor the broker turnover index in September were down 2.43 percent, compared to last year increased by 14 percent, an increase of ring substantially narrowed 15 percentage points higher than in August. September 39 cities housing turnover index fell 1.31 percent, an increase of 18%, an increase of chain fell 13 percent. Overall, in September for the traditional real estate sales season, but the overall turnover not up to expectations, the chain declined slightly year on year growth continued to slow.
…CIC Securities said that after experiencing pre-market downturn, September land market traded relatively flat housing sales market situation “golden” full, whether government or push to both the previous month and increased turnover last year. But in the sales slowdown, housing prices unsustainable background, high land prices become important factors that hinder motivation to get housing prices, and while the majority of the four-tier cities still in the destocking phase, the sharp rise in the fear of surprise difficult to repeat, is expected in the fourth quarter will continue to be stable based.
…Four-tier cities to some extent, into the property market difficulties, reason than two points: the long-term over-reliance on land finance, land sales by selling support economic growth; housing supply exceeds demand for those who have the ability to pay. Although the relevant departments and local governments to take the canceled purchase, credit limit, limit outside and relaxed the first suite that standard, lower two suites down payment loans and other measures, but still can not effectively address the issue. To quickly out of the doldrums, four-tier cities need to find out the real estate supply and demand, in order to allow housing prices to fall moderately reasonable inventory, and by restructuring, transformation and upgrading foster new economic growth point
…Meanwhile, the country’s 70 large and medium cities also have significant differentiation. August, new housing prices in Shenzhen MoM 5.2% year on year increase of 31.8% led the nation. Meanwhile, prices continued to decline year on year in 40 cities of decline is still more than 5 percent, and most of the four-tier cities. Thus, a foreign research institution in the field investigation on China’s Sichuan Province, a week-long, drawn “wary of China’s four-tier cities of the property market bubble, the greater the crisis in the making” conclusion.
Bifurcation continues.
