The property market has basically no more bubbles
Due to the partial hotspot regions of China's property market showing signs of bubbling, and because a large supply cannot be realized in a short period of time to balance the supply and demand relationship, the new round of regulation policies that started in mid-April last year are aimed at restricting demand. Therefore, restriction policies such as purchase restrictions, loan restrictions, and foreign investment restrictions all target the demand side.
Dawn Likai believes that restriction policies such as purchase and loan restrictions are also policies to squeeze out bubbles to a certain extent. This is especially evident with purchase restrictions. The purchase restriction policy has resulted in many people who want to buy a house, especially investors and speculators, having money but being unable to buy. Currently, overall speaking, investment and speculative demands have been artificially squeezed out from the demand side, and the property market bubbles have been basically eliminated. The market has been artificially restricted back to a market mainly for rigid needs.
Since investment and speculative demands have been largely limited outside of housing tickets, this has caused the property market transaction volume to continuously hover at low levels.
Take Beijing as an example. According to statistical data from the Beijing Real Estate Transaction Management Network, as of the 21st, the pre-sale residential signing volume in Beijing in August was only 3,357 units, and the second-hand residential signing volume was only 4,942 units.
Zhang Dawei, research director of the Beijing Zhongyuan Third-level Market Research Department, pointed out that as of the 21st, the pre-sale residential volume has reached the lowest value since January 2009 for the same period. It is expected that the pre-sale residential transaction volume in Beijing in August may be less than 5,000 units, and the second-hand home signing volume will continue to hover below 8,000 units.
In addition, places like Shanghai, Shenzhen, and Guangzhou have also seen similar situations of low transaction volumes, but the market has not seen the expected wave of price cuts.
Regarding this, Dawn Likai analyzed it from the perspective of the supply side. He believes that developers, as the suppliers of new homes, have stronger resilience than expected. For example, after policy restrictions on financing, developers have opened up channels such as real estate trust financing and overseas financing to withstand the pressure of restricted financing policies, thus alleviating the pressure on developers to cut prices and recover funds. As for second-hand home owners, who are the suppliers of second-hand homes, due to factors such as the preservation function of houses under the high CPI and the scarcity of housing tickets under the purchase restriction policy, they are currently still unwilling to easily sell. Because developers and second-hand home owners have not yet reached the point of panic selling, the current property market is still in a stalemate, and the wave of price cuts has been postponed.
Dawn Likai expects that if the policy continues, a wave of price cuts may come by the end of the year to the National People's Congress next year. As for the upcoming "Golden September and Silver October," the transaction volume may slightly increase, but it will still remain at a low level.
Real estate agents are experiencing different degrees of warmth and coldness
Under the backdrop of sluggish market transactions, the survival status of real estate agents is generally worrying.
According to statistics from the Beijing Lianjia Real Estate Market Department, in June, 1,224 real estate agencies in Beijing had zero transaction volumes. In addition, among the 5,562 real estate agency stores in Beijing, nearly 400 stores have closed.
Faced with a severe survival situation, Dawn Likai believes that under the current industry stalemate, the Centaline Group does not blindly pursue expansion.
He further explained that the company requires each location to formulate flexible strategies based on their own survival conditions. If a location can maintain profitability and has corresponding talent reserves, then it is a good opportunity for expansion now. However, if a location is in a loss-making state, then it needs to reduce its scale and prioritize flexibility. Therefore, overall, in the current environment, the Centaline Group prioritizes stability and mainly formulates survival strategies based on market and its own capabilities, without forcing expansion.
Different from the Centaline Group's strategy of prioritizing stability, Lianjia Real Estate is currently seeking counter-cyclical expansion.
It is reported that Lianjia Real Estate plans to expand its regional layout across the country from the current four cities—Beijing, Dalian, Tianjin, and Nanjing—to 15 cities in the next four years, which means opening two or three new cities each year.
Regarding the reasons for counter-cyclical expansion, Zuo Hui introduced with his usual calm and steady tone: First, from the perspective of economic development laws, the second-hand housing market is a product of economic development. According to the current development speed, within the next 5-10 years, there will be multiple cities like Shanghai and Beijing where second-hand housing dominates. The overall potential of the second-hand housing market is very large. Therefore, the current short-term low transaction volume will not affect the company's long-term strategic planning; secondly, the market low period is precisely a good opportunity for expansion; thirdly, the company has made sufficient preparations for expansion. In addition to the repositioning and building of service systems, the company estimates that it will raise more than 4 billion yuan of its own funds to support national expansion.
Some experts pointed out that in the environment where other peers are seeking ways to survive, Lianjia Real Estate's counter-cyclical expansion is due to private equity funds such as CDH Investments and Fosun Property Holdings already investing in Lianjia Real Estate, causing Lianjia Real Estate to have the pressure to expand and rush for listing.
This article is reprinted from Beijing Real Estate http://bj.house.sina.com.cn