2018-05-12

Real Estate Prices Hit Cyclical Peak

The Ministry of Housing and Urban Development invited city leaders to "drink tea." All of the cities invited have rising home prices in 2018...

iFeng: 刚刚楼市释放房价下跌一大新信号 大局已定?
In the past two months, the main leaders of many cities have been interviewed by the Ministry of Housing and Urban Development. This has aroused great public opinion and is also seen as a sign that the new round of regulation and control is about to start. Chico learned that before the May 1st, it was the heads of 10 cities including Xi'an, Haikou, Sanya, Changchun, Harbin, Kunming, Dalian, Guiyang, Xuzhou and Foshan. On May 9th, Chengdu and Taiyuan were responsible again. People are invited to tea. In a short period of ten days, 12 cities or houses that had house prices rising, or that had emerged as a housing boom, had been “emphasized” and the meaning was very clear.

The interview emphasizes that it is necessary to firmly establish the “four consciousnesses” and unswervingly adhere to the position that “houses are used to live, not used for speculation,” and insist on the real estate market's regulation and control goals to remain unshakable and unrestrained, and implement local regulatory bodies. Responsibility, due to the city's suitability for local conditions, and accurate measures to ensure the stable and healthy development of the real estate market.
This may be the final lid being placed on top of China's housing market. Credit controls and buying restrictions have already stopped the price rise in first-tier cities, this is the clean-up of the remaining smaller cities:
In Taiyuan, the price of new homes rose 7.6% year-on-year in March. According to data from the China Real Estate Association, new homes in Taiyuan rose 1.48% in April from the previous month. The increase did not seem to be significant, but the price of second-hand homes rose 3.33%, and the year-on-year increase was as high as 30.92. %. The problem is much more serious. This is in contrast with the country's macro-control of "stabilizing the property market." The situation is similar to Changchun and Harbin, second-hand housing prices rose more than 20% year-on-year.

It can thus be seen that, under the current situation, the state is disgusted with the repulsion of housing prices that continue to rise or rise, and the attitude of controlling house prices is also very clear. Therefore, it is required that all hot cities must unswervingly adhere to the principle of “no housing to fry” and unrestrained regulation and control. Otherwise, it will be necessary to ask questions of the main responsibilities. In the future, whether these urban real estate markets can maintain steady and healthy development is the central government. The important basis for decision-making.

At this point, everything is clearly revealed, and the new round of more intense control over the hotspots in the interviewing hot cities is about to drop. The price of housing may not rise again for a long time.
I already expected home prices would start declining given the first-tier has already peaked and is turning lower, but a government crackdown will accelerate the trend several months. The next questions are do prices fall?, and by how much?, and then how long until the government blinks?

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