The Chinese hard landing continues to burn. The two failed engines of growth are still aflame.
OMICRON progress is slow and now inhibited by the Beijing outbreak:
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The lockdown impact on the economy and property is a roaring blaze:
China’s current activity indicator is deep in recession:
More policy moves are afoot:
Chinese local governments are scrambling to relax property policies after the country’s top policymakers openly supported local authorities’ efforts to stablize the sluggish housing markets.
The city of Meizhou, South China’s Guangdong province, on May 1 announced a package of measures to promote healthy development of the real estate sector.
The measures include accelerating approval of mortgage loans, increasing the quota of the loans, lowering the minimum downpayment ratio for first-time home buyers who borrow from commercial banks to 25%, cutting downpayment ratio for homebuyers that already own one home and have paid off mortgage loans to 30%, pushing for declines in mortgage loans.
The city lowered the minimum downpayment ratio for second-home buyers who borrow from the Housing Provident Fund to 20% from previous 30% and raising the maximum amount that first-time home buyers can borrow from the Fund.
Ganzhou, Jiangxi province, on May 1 kicked off the city’s one-month Real Estate Festival in the period. Financial institutions lower home mortgage rate for first-time home buyers to 5.2% and second-home buyers to 5.35% and lowers down payment ratio to the lowest levels allowed by the national policy.
Yueyang city, in South China’s Hunan province announced a series of measures to “stabilize the housing market” including providing preferential deed tax rates, offering home purchase subsidies, allowing property developers to pay for land purchases in installments.
Luoyang city on April 28 announced eighteen measures to support the housing market, with measures including easing regulations on home mortgage loans from the Housing Provident Fund, raising the maximum borrowing from the fund and lower downpayment ratio for first-time home buyers etc.
According to data compiled by Centaline Property Agency, more than 80 cities have relaxed property curbs so far this year, and in April alone, over 30 cities eased housing policies.
The moves came after the Politburo, the top decision-making body of the ruling Communist Party, expressed supports to local governments’ move to adjust property policies to stablize the housing market and, for the first time ever, pledged to optimize regulations on property developers’ pre-sale proceeds. Read more …
Industry insiders expect more regions to take measures to increase homebuyers’ payment capability, actively support developers’ reasonable financing needs and optimize regulations on pre-sales proceeds.
“The expression in the Politburo meeting was very specific and carried positive tones” and the momentum in the real estate market is expected to gradually enter a recovery given the potential positive changes in regulatory environment, the China International Capital Corporation (CICC) said in a note.
Besides usual expressions such as “housing is for living, not for speculation” and “promoting steady and healthy development of the housing market”, some other expressions are noteworthy, it said.
For instance, the previous expression of “supporting reasonable housing demand” was changed to “supporting rigid and improving housing demand”, meaning that those who buy homes to improve living conditions should also be supported.
The Politburo openly “supports local governments to improve real estate policies based on local situations” and that will encourage local governments to more resolutely introduce policies to stabilize the housing market, it said.
In addition, the Politburo specifically said “optimizing regulations on property developers’ pre-sales proceeds” which will play a crucial role in easing the sector-wide liquidity crunch, it said.
The expression at the Politburo meeting sent a more specific and more active policy signal, said Xu Xiaole, chief market analysts at Beike Research Institute.
Maybe so. But how does giving developers access to more presales revenue reassure buyers that their deposits will not be lost amid collapsing developers?
I still think Beijing is pushing on all the wrong strings.