According to data released by the National Bureau of Statistics on the 16th, in December 2022, among the 70 large and medium-sized cities, the number of cities where the sales price of new commercial housing has dropped has increased. The sales prices of new commercial housing in various cities were flat or decreased month-on-month, among which the first-tier cities increased year-on-year, while the second- and third-tier cities decreased year-on-year.
In December 2022, the sales prices of new commercial housing in first-tier cities will basically stop falling. Experts said that a series of policy measures introduced recently from both sides of real estate supply and demand are gradually producing results, and the market expects the recovery trend to be basically confirmed. Many places meet the conditions for lowering mortgage interest rates, and the property market will continue to increase its “policy according to the city”.
The price reduction has not been extended
In December 2022, the sales price of new commercial housing in first-tier cities fell by 0.2% from the previous month to remain flat; the sales price of second-hand housing decreased by 0.5% from the previous month, and the rate of decline increased by 0.1 percentage points from the previous month. The sales price of new commercial housing in second-tier cities fell by 0.3% month-on-month, and the rate of decline increased by 0.1 percentage points from the previous month; the sales price of second-hand housing decreased by 0.4% month-on-month, the same rate of decline as last month. The sales price of new commercial housing in third-tier cities decreased by 0.3% month-on-month, the same rate of decline as last month; the sales price of second-hand housing decreased by 0.4% month-on-month, and the rate of decline narrowed by 0.1 percentage points from the previous month.
Year-on-year, in December 2022, the sales price of new commercial housing in first-tier cities rose by 2.5% year-on-year, the same increase as last month; the sales price of second-hand housing rose by 0.6% year-on-year, a decrease of 0.6 percentage points from the previous month. The sales price of new commercial housing in second-tier cities decreased by 1.1% year-on-year, a decrease of 0.1 percentage points from the previous month; the sales price of second-hand housing decreased by 3.2% year-on-year, the same as the previous month. The sales prices of new commercial housing and second-hand housing in third-tier cities fell by 3.9% and 4.8% year-on-year, respectively, the same as the previous month.
In addition, from the perspective of the number of cities with housing price changes, in December 2022, among the 70 large and medium-sized cities, 55 cities had a month-on-month decrease in the sales price of new commercial housing, an increase of 4 from the previous month; 63, an increase of 1 from the previous month.
E-House Research Institute estimates that in December 2022, the price index of new commercial housing in 70 cities will drop by 0.2% month-on-month and 2.3% year-on-year, roughly the same as last month. “The decline in the house price index has not expanded, indicating that a series of policies represented by the ‘three arrows’ have eased the panic of real estate companies to cut prices.” Yan Yuejin, research director of the think tank center of E-House Research Institute, said.
Policy effects are beginning to appear
Entering 2023, the real estate market has shown a little warmth.
According to data from the China Central Index Research Institute, the overall transaction volume of the property market last week increased month-on-month. Among them, the second- and third-tier cities had a larger increase, and among the first-tier cities, Beijing had the largest increase of 56.7%, and the total inventory decreased month-on-month.
“The upward trend of market expectations is relatively obvious.” Xu Xiaole, chief market analyst of the Shell Research Institute, said that it is expected that the previously suppressed consumer demand for improved housing will be released at a faster pace, and the real estate market in core cities is expected to usher in a “good start” in the first quarter of 2023.
The People’s Bank of China and the China Banking and Insurance Regulatory Commission recently issued a notice on the establishment of a long-term mechanism for the dynamic adjustment of the interest rate policy of individual housing loans for newly issued first-time housing, and decided to establish a dynamic adjustment mechanism for the interest rate policy of first-time housing loans. People in the industry believe that this indicates that various regions will further increase their efforts to “implement policies according to the city” and promote the stable and healthy development of the real estate market.
Judging from the newly released housing price data of 70 cities, among these cities, the sales prices of newly-built commercial housing in 40 cities have dropped month-on-month for three consecutive months, meeting the aforementioned conditions for the dynamic adjustment of the housing loan interest rate policy.
Looking forward to 2023, Ding Zuyu, CEO of E-House Enterprise Group, believes that all localities will continue to “implement policies according to the city”, make full use of the policy toolbox, and increase policy regulation on the real estate demand side.
