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China Real Estate Development Report No. 17 (2020) continues to uphold the objective, impartial and scientific neutral purposes and principles. Tracking the latest developments of China’s real estate market, in-depth analysis of market hotspots. Looking forward to the development trend in 2020, actively planning coping strategies. The book is divided into general report, market, service, city group and hot topics. The general report makes a comprehensive and synthetic analysis of the development trend of the real estate market in 2019. The other chapters analyze the development and hot issues of real estate market from different perspectives.
In 2019, China’s real estate market as a whole showed a steady downward trend. First of all, there has been some easing at the policy level. The central economic working conference at the end of the year changed the formulation of “not using real estate as a short-term means to stimulate the economy” in the middle of the year, emphasizing that “we should adhere to the positioning that the house is used for living, not for speculation, comprehensively implement the long-term management and control mechanism of policy-making for the city, stable land price, stable house price and stable expectation, and promote the stable and healthy development of the real estate market”. Secondly, there was an absolute decline in market sales. The market price index peaked in January 2017, and then the growth rate of housing price index dropped to below 10%, and the growth rate of market price slowed down in the next two years. The third is that the growth rate of development investment in 2019 is the first high and the second low, and the growth rate gradually falls back, with weak growth. The fourth is that the decline of land purchase area is gradually shrinking, the transaction price of land market is fluctuating upward, and the land market is gradually warming up.
Under the influence of the new crown epidemic, great changes have taken place in the current real estate market in terms of sales, leasing, land, enterprise funds, housing security, etc. The main performance is as follows: the volume of transactions in the real estate market has declined sharply and the market has no price; the housing rental market has intensified industry integration and diversified development trend can be expected under the influence of the epidemic; the land market has declined and the transactions in the first tier cities have revived driven by high-quality land plots; the small and medium-sized enterprises are more difficult under the pressure of capital and the industry integration has accelerated; the transformation of old residential areas has been incorporated into urban security housing project benefits people’s livelihood and expands domestic demand.
Looking forward to the novel coronavirus pneumonia outbreak in 2020, the US stock market collapsed and the global asset prices collapsed and the global economy was in danger of recession. After the outbreak of the epidemic, China’s negative economic growth in the first quarter has become a foregone conclusion, and the annual economic growth is likely to face a significant decline. As the effectiveness of domestic epidemic prevention and control continues to show, the progress of resumption of work and production will be accelerated, and the normal production and living order will continue to recover, the impact of the epidemic will gradually weaken in the second quarter, especially some economic activities suppressed in the early stage will gradually release, and it is expected that the economic operation in the second quarter will be significantly higher than that in the first quarter.
In 2020, the control of house prices will continue, and the positioning of “no speculation in housing” will not change. The bottom line thinking of the real estate control policy is “three stability” (stable price, stable house price and stable expectation), which will neither over stimalated nor orer tighetned. All regions will continue the call of the central government for “implementing policies for the city” in 2019, and the policy will continue the operation trend of “two-way adjustment”. But the role of “one city, one policy” may be strengthened. With the end of the epidemic, the price limit of new houses in some cities is expected to be relaxed, and the policy level will have greater tolerance for the rebound of house prices.
With the gradual control of the domestic epidemic situation, the improvement of the macro policy environment, the centralized release of the over suppressed market demand, the market will recover rapidly, and the market sales and investment will be gradually repaired. Due to the great impact of the new crown epidemic on the real estatemarket sales in the first quarter, it is expected that the annual market sales will fall further. After the outbreak of the first and second tier core cities, there will be a wave of rigid demand and improvement demand to be released. With the improvement of the macro policy environment, the market is expected to take the lead in recovering. The third and fourth tier cities will still face great pressure. Due to the low base of the land market in 2019, the growth rate of land acquisition area will slowly pick up from the low level, and the overall decline will continue to narrow. It is expected that the year-end may turn from negative to positive. Due to the good fundamentals and the support of purchasing power, the land market in the core tier one and tier two cities will continue to recover. Due to the contraction of the shed reform policy in the third and fourth tier cities and the gradual increase of investment risk, real estate enterprises will focus more on the core first and second tier cities, and the land purchase area in the third and fourth tier cities will further fall. Due to the great impact of the new crown epidemic on the real estate development investment in the first quarter, it is expected that the growth rate of real estate development investment in 2020 may fall to about 3%. After the market transaction was interrupted by the new crown epidemic, the market gradually recovered, and the market price is expected to maintain a small and stable upward trend. From the perspective of specific city level, the market in the first and second tier hot cities is expected to take the lead in recovering. The market demand and improvement demand are released in a centralized way, resulting in a wave of post epidemic sales climax, and the market price is likely to rise gradually. Due to the clearing of market demand in the last round in the third and fourth tier cities, the market is expected to be difficult to improve in the short term under the impact of the new crown epidemic, and there is still a risk of further decline in price.