VIP Class Notes (Jesse)

Compared to the previous year, real estate market regulations and controls have become more severe. Firstly, the demand side of the market has been restricted through purchase limitation; loan restriction and sale restrain to curb speculative investment demand. Secondly, for the supply side the tempo and intensity of land supply has increased and there has been an effort to develop the housing rental market, and maintain the principle that “houses are for people to live in, not for speculationâ€. At the same time, rounds of real estate market remediation regulate the property hoarding, bundling, and other violations in order to develop a healthy and stable real estate market.
In the last two months, the hot spot cities have been frequently inspected by the supervision department. First, the Ministry of land and resources started to supervise and inspect the sale of residential land contracts across 70 large and medium-sized cities and hot spot city, Suzhou, to prevent land bringing wealth, land hoarding and defaulting on land payments. After that, NDRC (National Development and Reform Commission) and Ministry of Housing and Urban-Rural Development cross checked 15 cities (Beijing, Foshan, Jiagxing, and etc.) due to housing price control. So far, the “storm” has affected 73 cities nationwide.

According to the housing transactions report released by Shanghai Yi Ju Research Institute in November, the deal area of the newly built commercial housing is 23.38 million square meters in 50 typical cities, increasing by 3% from the previous month, a decrease of 13% from a year ago. The chain data showed a slight increase compared to the data of 9 consecutive months previously which all declined. Although the chain data of 3 consecutive months had a slight increase, the turnover is still not high compared to the data from last year, showing that the property market is not hotter than last year.
The turnover of the property market in November slightly increased overall, with one important factor being that the government has played a certain role in market supervision. Even so, the turnover of November is still less than the same period of last year. According to the statistics released by Zhongyuan Real Estate Research Center in November, about 28 provinces and cities issued about 36 regulatory measures related to the real estate market, and for many of which it was their first time to issue the property market regulation policy. At this point, the real estate regulation policy has been issued 246 times throughout this year. Zhang Dawei, chief analyst of Zhongyuan Real estate, said that 2017 can be regarded as the most dense year in terms of the issuing of real estate regulation policies in Chinese history. Especially since September this year, the regulation policies were particularly intensive in China. From the regulation policy issued in November, it can be found that there were about 16 leasing policies issued in China including Beijing, Shenzhen, Wuhan, Chengdu and other places. Whether in December or next year, the principle “houses are for people to live in, not for speculation†will deepen, and the local market regulation and control policy will become more intense.

Because of the real estate inventory de-stocking policy, commercial housing inventory continues to be on a downward trend, but recently a research organization released the land market report showing that as of the end of this October, the land reserve area of the 50 typical cities is 660.28 million square meters, increasing by 3% from the previous month, which is an increase of 15% compared to a year ago. From a data point of view, the scale of growth of land reserve has been growing for the last 12 months. From the perspective of urban classification, in October, the land reserve scale of 50 first tier, second tier and three tier cities were 51.79 million square meters, 453.91 million square meters and 154 .57 million square meters respectively. The growth rate compared to the previous month increased by 9%, 0% and 10% respectively, with an increase of 6%, 9% and 38% from a year ago respectively. For the past 35 months, the scale of land reserves has kept falling over the year. In October this year, it was the first time that a positive increase compared to the previous year was seen. The signal significance of the data is that the recent continuous supply of land in first tier cities has had a positive effect, which helps to form a relatively abundant housing resource in 2018. For the third tier cities, the good performance of their housing sales market directly led to the phenomenon, which is that the local governments actively supply the lands and housing companies actively take the lands.

As the most indispensable participant in the real estate market, the rental industry is a huge space to develop and also encourages the housing enterprises to accelerate the implementation of their market strategies. As of November 3rd, 11 Real Estate Companies: China Merchants, Huarun, Vanke, Hengda, CNOOC, golden group, Biguiyuan and Galaxy and BYD, Fanta, EVOC, Siu Chi , and another 11 enterprises, and China Construction Bank held a housing rental strategic cooperation signing ceremony in Shenzhen, which announced that they entered the rental market; according to incomplete statistics, there are more than 20 of the top hundred real estate companies started to launch long-term rental department development strategies.

It is noteworthy that since July 2017, nine ministries and commissions of the Ministry of housing issued the notice on “accelerating the development of the housing rental market in large and medium-sized cities with population inflowsâ€, Internet giants also began to enter the rental market. As an example, Alibaba and the Hangzhou Housing Authority signed an agreement to build a “smart housing rental platform “; Alipay announced the official launch of the housing credit platform in Shanghai, Beijing, Shenzhen and other 8 cities.