After the Chinese authorities introduced a significant market rescue policy, the Political Bureau of the Communist Party of China (CPC) convened a meeting again, emphasizing the need to stabilize the real estate market and halt the decline. However, doubts linger over whether “Is the real estate market really stabilizing and rebounding?”. Industry insiders have expressed that the government’s statements have left many homeowners uncertain, and the expectation for a rebound in the housing market might be overly optimistic.
The CPC Central Political Bureau convened a meeting on September 26 to specifically analyze the current economic situation, mentioning the need to “intensify efforts to introduce incremental policies” and for the first time putting forward the goal of “promoting the stabilization of the real estate market to halt the decline”.
Why bring up “promoting the stabilization of the real estate market” at this time? Reports from the financial sector on September 27 indicated that data showed the real estate market was still in an adjustment phase in August this year, with a 27% year-on-year decrease in the transaction volume of newly built commercial residential properties in 100 cities nationwide in August, reflecting significant pressure on the real estate market adjustment with market demand still contracting.
As the real estate market enters an adjustment phase, companies in the real estate industry and along the real estate industrial chain have been impacted to varying degrees. The stock market acts as an indicator of economic conditions, with the stock prices of listed companies often signaling their operational status. Certain real estate stocks and those in the real estate industry chain have already experienced declines, with some stocks plummeting by over 80%, reflecting cautious and pessimistic expectations.
Reports stated that by first addressing the stabilization of the real estate market, authorities emphasize stringent control over incremental growth, optimizing existing inventory, and enhancing quality, using various means to promote the stabilization of the real estate market as opposed to the previous aim of promoting stable and healthy development in the real estate market.
In recent years, there has been a flurry of stimulus policies related to real estate, with recent measures aimed at reducing interest rates on existing housing loans. With a series of favorable real estate policies, it begs the question – will the real estate market stabilize and halt its decline?
The answer, as reports suggest, depends on when market demand begins to rebound. Factors such as inventory pressure, turnover cycles, and market prices will reflect changes in real estate market demand to some extent. Currently, the turnover cycle in the real estate market stands at 25.2 months, indicating significant pressure for inventory turnover. Simultaneously, the number of transactions, transaction volumes, and prices have all experienced varying degrees of decline, underscoring the significant pressures facing the stabilization of the real estate market.
On September 27, the question “Is the real estate market stabilizing and halting its decline?” trended on social media, sparking heated discussions.
A real estate investor in Chengdu said, “The market is already saturated; it’s a situation where there are prices but no transactions. Who dares to step in without stable income?”
A netizen from Guangxi commented, “The answer is, the real estate market is dead.”
Another netizen from Guangdong remarked, “Whether you like it or not, objectively speaking, real estate prices will fall back to where they were 20 years ago.”
A netizen from Shandong added, “Don’t overthink it; just let it go and accept reality. Stop hoping so much; real estate prices won’t rise for another decade.”
A Beijing blogger specializing in national property purchases and family asset allocation, known as “Peach,” stated that China’s housing prices have always been a conspiracy. Authorities encourage buying when it benefits them and suppress it when it doesn’t. The slogan “Houses are for living, not for speculation” used to be the political correctness, but now pushing up housing prices is the new political correctness. After all, even phrases like “Deeply aware of the political and humanistic importance of real estate work” have been mentioned.
She further added that whenever China’s real estate enters an adjustment cycle, it brings about internal and external issues. The consequences of a property market collapse would be unbearable for everyone. Housing prices must remain stable; any instability could lead to a tornado, trapping everyone within its vortex.
On May 17, the State Council of the CPC held a nationwide video conference on effectively guaranteeing the stability of the housing market. He Lifeng, a member of the CPC Central Political Bureau and Vice Premier of the State Council, emphasized the understanding of the humanistic and political importance of real estate work and advancing key initiatives such as guaranteeing housing and digesting the existing inventory of commercial housing.
A real estate agency from Jinan, Shandong, expressed that following the recent directive from the CPC leadership to promote the stabilization of the real estate market, some have interpreted it as a signal for the real estate market to warm up and rebound.
Introducing themselves as experts in Jinan’s real estate industry for 12 years and familiar with all processes of second-hand property transactions, the agency stated that the real estate market stabilizing is wishful thinking.
Blogger Xu Hongsen recently visited local real estate agencies in Wuzhou, Guangxi, to understand the property prices there. He filmed outside a real estate agency and conversed with the agents.
Advertisements posted by the agency showed a 95-square-meter, 3-bedroom, 2-bathroom apartment in a district for sale at 199,000 RMB. Xu noted that properties in the area were previously fetching a million RMB.
Another advertisement displayed a stand-alone villa in the Electric Power Bureau compound, over 200 square meters with a garage, four and a half floors, a front yard, priced at 1.3 million RMB; a new elevator apartment in the Red An district of Wuzhou being sold at 2,050 RMB per square meter.
Xu remarked, “This is the real property market of Wuzhou, Guangxi. Regardless of the hype and speculation from property enthusiasts, prices cannot be inflated anymore; there’s no market for it, as the real estate trend has already waned. It’s imperative not to buy property anymore, let alone take out loans to buy them.”