Ministry of Housing Wants The Market to Regulate Housing; Official Tells Government Not to Interrupt Market Forces

住建部:此次楼市不同于08和11年 中央更希望市场调整

The Ministry of Housing has been doing local research into the property market and they have been speaking with local governments and developers. One industry insider who was involved with discussions said Chinese local governments have the power to regulate their housing markets, but this doesn't mean they can ease buying restrictions. The central government wants the market to regulate housing. The local governments can deal with oversupply, but they cannot use old methods to rescue the market because it risks reinflating the bubble. A Hunan official said the central government is a bit nervous due to public pressure, last year they didn't do these local reports. [China also has a new housing minister.]

Investors jumped at the news of any possible easing this week:

Investors bet on China property curbs easing
China Vanke and Poly Real Estate advanced more than 3 per cent, with the Shanghai property sub-index climbing 2.1 per cent for the biggest gain since April 22. Greentown China Holdings and China Overseas Land & Investment jumped more than 5 per cent in Hong Kong.

The central government had allowed cities to adjust home-buying curbs - except for Beijing, Shanghai, Guangzhou and Shenzhen - the Southern Weekly reported on Thursday, citing several unidentified people from the housing ministry.

This buying appears ill advised.

Back to the former article: a government official who participated in one of the discussion forums with the Ministry of Housing said the situation is not like 2011 or 2012, the numbers look bad because they're coming off such a high base in 2013.

I think this section sums up the position of the government and should have investors nervous (my translation):
"In some core cities housing is still a scarce resource and they are unable to relax the buying restriction right now. Mentioning the Foshan rescue action, the Ministry of Housing official said at the forum, 'Foshan has a free hand to relax buying restrictions, which is its right, but will the government bear the responsibility?' the source told reporters.

"Ministry of Housing officials at the forum stressed that local governments cannot act on account of the fact that the real estate adjustment will affect local government finances financial, banking and other areas; before the real estate industry was responsible for too much, including economic growth, employment, housing and industrial restructuring, etc. The adjustment is spontaneous market regulation, if artificially interrupted, the future real estate market will have a hard landing, the consequences will be even worse." the source said.

Local governments have some flexibility to adjust policy, but they're going to be held accountable for the results. Once again the central government reiterates its desire to see market forces regulate the housing market, and goes so far (in the case of at least one official) as to stress that local governments cannot rescue the housing market as a means to prevent pain for local government finances, banks and other industries. The government also doesn't expect a major crisis like 2008 though, or even one like 2011/2012, which means a rescue isn't coming anytime soon.

住建部:此次楼市不同于08和11年 中央更希望市场调整
China property stocks surge, part of the city slashed prices of market performance, sparked concern the central level.

Reporters learned exclusively, the Ministry of Housing recently broken down into smaller research-intensive local property market, to learn about the extent of decline in the real estate market, and focus on the work to senior State Department report on May 24.

"The Living survey construction department in addition to their routine research tasks have department, also out of the central demands." A source close to the Ministry of Housing told reporters, "At present, the central level high degree of concern on the property market therefore requested the Ministry of Housing obvious the current market volatility, adjusted for urban policy thoroughly summarized the situation up. "

Government sources who participated in the symposium revealed in Guangzhou, the center is intended to the real situation around the property thoroughly, comprehensively and accurately determine the market situation, a clear direction to guide local regulation.

Such persons to participate in the discussion, said the Ministry of Housing survey results show that the performance is still a good part of the city center, is currently on the economic impact is not large, but the market began a new division. Originally considered a number of four-tier cities will be worse, but the survey results came out, the situation is better part of four-tier cities in Hangzhou , Guiyang, Shenyang and other second-tier cities.

"Ministry of Housing officials bluntly, the place does have the right to self-regulation, but not identical to relax the restriction, some of the policy must continue to adhere to relax the restriction may give market signals convey wrong, that that the country is beginning a new round bailout, central reluctant to see such public opinion. "an industry source told reporters involved in Shenzhen forum.

The source also said that control the direction of the Ministry of Housing to convey is that in 2008 and 2011 two property markets, because the growth interruption insurance, hope this time the central market to self-adjust. The local government in preventing excess supply, we can not use the traditional rescue ideas will bubble to inflate again, triggering a hard landing risk. In property taxes before, there is no inheritance tax and other economic measures introduced, administrative controls in some central parts of the city can not quit.

Emergency thoroughly local property market

Sources close to the Ministry of Housing and above revealed that as early as the end of April, early May, the Ministry of Housing Secretaries went to the city to find out about individual cases, due to the recent changes in the market more quickly, public pressure is relatively large, so live construction department again went around the research, diagnostic market conditions.

"The selected cities, primarily first-tier cities, second-tier property market fluctuations in major cities and hot spots in the third-tier cities, these cities are representative, there are some adjustments on some urban policy." The source told reporters, in addition to beads Triangle area, as well as the Yangtze River Delta region, Zhejiang, Jiangsu and other provinces inventory more serious.

Research in the Ministry of Housing in the Pearl River Delta region, the forum has the participation of Guangzhou city seven representatives, including Huizhou, Zhaoqing, Shaoguan, Zhuhai, Foshan, Zhongshan, Guangzhou, Foshan Gaoming which has been secretly bailout.

Guangzhou government to participate in the above symposium revealed that representatives of reporting material shows Huizhou, Huizhou stock market currently has more than ten million square meters area, with the current going rate is calculated, it is difficult to digest for two years, is seven representatives of cities the largest inventory.

After the Guangzhou forum to learn more on market conditions, May 23, the Ministry of Housing and research personnel rushed to Shenzhen, the morning convened a local housing prices, banks, intermediaries, experts and other industry representatives met in the afternoon to the new real estate site survey .

In addition to field research, there are some cities were asked to report the real estate market in the written material. Hunan Provincial Housing Department official told reporters, did not go to the Ministry of Housing, Hunan research, but ask them the morning of May 23 in the 1-4 month reporting up the real estate situation in Hunan, including basic property market, there is now What are the issues and plan the next step, such as local government.

"Last year, the market situation is relatively stable, there is no similar reports, this year some special cases, public pressure is also great, and therefore the central level a little nervous." Above Hunan Provincial Housing Department official said.

"Department of Housing and Urban Research results show that the overall situation of the property market is not so bad, from January to April this year, the index decline was large, because the high base last year, in fact, the current market situation is better than the same period in 2011 and 2012 . "above the government to participate in the forum, told reporters in Guangzhou.

Such persons to participate in the discussion also revealed that the government can not improve the current emphasis on volume. With the deal, the developer funds can be withdrawn from circulation, the investment will not be affected, the economy would not be a serious problem. Today, the Government headache is how to digest an oversupply problem.

"At present, due to the financial constraints of local government and buyers are reluctant to provide large subsidies, coupled with the purchase of second and third tier cities in the implementation of policies in some relatively loose, rescue effect doubt." He said.

Control the direction specified

"Central do not send [ News Price apartment Review ] people, places you really want to mess up. "above the government to participate in the forum, said in Guangzhou, has remained silent since the central, local feel very confused, because lost in the middle of attitude many can only secretly bailout means is varied.

Recently there have been media reports that the Ministry of Housing who confirmed that, in addition to the deep north of Guangzhou, other cities can purchase self-regulation policy, especially where inventory is too large, but not explicitly posting.

These participants told reporters, live at the forum was built officials specifically mentioned the matter, issued this statement is deputy director of the Ministry of Construction and Regulation Department Xu Zongwei origin, now retired, can not represent the voice of the Ministry of Housing.

The source also revealed that the Ministry of Housing officials said at the forum, where indeed have the right to self-regulation; but not to whether the relaxation means restriction as to stimulate the market, seeking short-term economic growth; demand from industry-oriented long-term healthy development point of view, from Several aspects of public services supporting the improvement, promotion of new urbanization to the settlement of the property bubble soft landing problem.

"Some central cities, housing is still a scarce resource, temporarily unable to relax the restriction. Turning Foshan bailout behavior, Ministry of Housing officials said at the forum, 'Foshan given a free hand to relax the restriction, which is its right, but the Government can bear Affordable responsibility? '"the source told reporters.

"Ministry of Housing officials at the forum stressed, not because of the real estate adjustment will affect the sound local financial, banking and other aspects of disarray, before the real estate industry took on too much, including economic growth, employment, housing and industrial restructuring, etc. The adjustment is the spontaneous market adjustment, if artificially interrupted, the future real estate market will be a hard landing, the consequences more terrible. "these people said.

After the Ministry of Housing Research Yangtze River Delta, May 23, Hangzhou, introduced the "drop limit order" requiring 15 percent less than the record price of real estate does not allow the network to sign, or need to re-apply for the record price.

"Local government bailout direction also think of ways to inventory, Hunan six or seven one thousand real estate project companies, corporate strength is not strong, weak anti-risk ability, once funding strand breaks, will appear at running phenomenon." Housing construction in Hunan Office official said, currently only traded down, the price is fairly stable, if the price of land is not the same loose, yet inseparable from the land because of finances.

Concerned about the central bank "propaganda" effect

After April this year, the property market turns sharply down, which made the real estate market as the Ministry of Housing authorities unexpected.

March Hangzhou and other places signs of falling prices, the Deputy Minister of Construction Qiu live attitude, the price will not spread phenomenon in Hangzhou. But after April, the price surge preached diffusion trend.

During the two sessions this year, Vice Minister of the Ministry of Housing Qi Ji made ​​this market regulation direction is "bi-directional control", and this made ​​the authoritative interpretation: the so-called bi-regulatory guidance also said that the first-tier cities continued to increase supply, suppression to curb speculative investment demand, restriction policy does not exit. As for the stock than the larger cities, to control land supply structure, the supply structure.

"Two-way control policies focus is to maintain the role of market stability and avoid overheating or too cold, at the time, most of the city's real estate market is overheated." President of the National Federation of Real Estate Chamber of Commerce Niemeisheng said, "in accordance with market regulation The top-level design, while maintaining the stability of the market, some local administrative means intervention will gradually leave the market means become the primary means of regulating the market. "

"From the current point of view, the central re-introduction of the real estate market should not be 'one size fits all' policy, but steady economic security for the second half, the introduction of a number of future-oriented policy is possible in terms of finance and investment." Above close to the Ministry of Housing The spokesman told reporters.

Guangzhou government to participate in the above symposium revealed that the meeting, the Ministry of Housing Huizhou special request to do a special material to shine real estate reports, in order to understand the scale and impact involved in private lending in the end how much.

"In addition, the Ministry of Housing officials also very concerned about the May 12 central banks 'propaganda' to relax after a loan, commercial banks are 'obedient' It is understood that ICBC will only increase in the mortgage lending scale maneuvers required within the jurisdiction of the Shenzhen Branch accelerate the payment of housing loans, the remaining banks were not obey. "the source said.

He also revealed that the Ministry of Housing officials at the meeting stressed that the credit limit is not administrative intervention, but the purchase is in the economic, tax measures are not in place in case of forced introduction of the worst, in line with the current needs of the Chinese economy.

"Central banks do not want to drag, but also take the amount required developers to cut prices, but the meeting developers and banks and uncompromising. Developers complain that banks are not lending, the price of the funds are not withdrawn from circulation. Banks who claimed that the bank did not stop Loans, just floating interest rates. "Shenzhen insiders who participated in the forum, told reporters.

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