Housing Crackdown Widens in July, Dalian Launches Price Controls

The Politburo reiterated that housing will not be used to pull economic growth higher yesterday. Cities have also been tightening policy this month, with the latest being Dalian. It passed strict pricing limits after home prices increased 1.2 percent in June. A day earlier, Hefei held a meeting with roughly 40 developers as it also tries to clamp down on rising prices.

This month also saw Kaifeng cancel buying restrictions after 20 percent discounts failed to boost sales. the city then reversed the policy days later, leading some to slam the government for eroding public trust: Social Mood: Frequent Housing Policy Changes Eroding Public Trust

Suzhou also tightened. SCMP: Suzhou tightens property curbs for the fourth time in 2019 as overheating home market has defied policies to cool prices

The news hit property stocks on Wednesday. STCN: 楼市调控刷屏！地产股应声大跌，半天蒸发500亿！有龙头暂停拿地. One firm has suspended land purchases:

The news said that R&F Real Estate issued a notice to suspend the land acquisition

In fact, some housing companies have been exposed to choose to suspend land acquisition.

According to a recent report by China Construction News·China Real Estate, on July 26, R&F Properties issued an internal document “Notice on Requiring Regional Companies to Ensure Sales Tasks”. The document clearly stated that in the second half of 2019, the land acquisition work was suspended in principle, and many times it was mentioned that it was necessary to promote sales and collect funds. Among them, “to achieve the project's sales target as the first priority, and to maximize the project revenue based on ensuring sales volume” has been emphasized.

As I've pointed out before, first in January of this year, China cannot unleash a large stimulus without risking another speculative housing boom. The country is trying to deleverage (or was, the word was removed from that Politburo statement) and deal with a slowdown in growth, yet still these cities are dealing with the risk of rapid home price increases because capital is finding its way into the sector. Failure to control real estate creates a dilemma, which is why China is trying to quarantine the sector from the credit market. If it cannot, then it has to choose to let credit inflation run into real estate or tighten overall credit growth to stem the real estate sector, risking the rest of the economy.

East Money: 房价只准跌不准涨，但跌不能超5%！大连加码楼市调控发布限涨令
Sogou: House prices are allowed to fall but not rise, but they cannot fall more than 5%

Price cannot be changed within 6 months. After 6 months, you can apply to lower the application price, but the price shall not fall more than 5%.

Recently, the Dalian Municipal People's Government Office issued a report on strengthening the real estate market regulation work notice, to increase the regulation of the property market.

The circular requires that all real estate all items must be declared pre-sale price, right accept commercial accommodation house price. According to regulations, relevant departments of developers under the guidance temporarily suspend their online sign filing qualifications.

Dalian is one of several cities that have started ramping up housing restrictions.

STCN: 房价涨得太快！又一城市设定房价"涨跌停板"，还有城市对房企开刀

After cities such as Xi 'an, Luoyang and Hohhot increased their prices too fast, Dalian and Hefei also stepped in!

On July 30, Dalian issued a price limit order, setting a "limit on the rise and fall" of house prices, which not only limits the rise of house prices, i.e. the pre-sale price shall not be higher than may, the price shall not be adjusted within 6 months, and after 6 months, only a downward adjustment can be applied, but also limits the fall of house prices, i.e. the downward price shall not exceed 5%.

Hefei also heard the news of the increase in the regulation of the real estate market, and adopted "three pauses" and "three strictness" measures against problematic real estate enterprises, i.e. suspension of land supply, suspension of pre-sale and suspension of online sign measures. Strictly control bank loans, pre-sale funds and filing prices.

Since July, various real estate tightening policies have been issued intensively. According to statistics, real estate is regulated more than 40 times a month, reflecting that "stabilizing expectations, land prices and housing prices" is still the main content of the policy. After the meeting of the political bureau of the CPC central Committee reiterated that "housing will not be speculation" and made it clear for the first time that real estate will not be used as a short-term stimulus to the economy, it is expected that the regulation of the property market will continue to be strict in the second half of the year.

Hefei's "Three Suspension" and "Three Severity" to Problem Housing Enterprises

Following Dalian's increase in regulation, Hefei has also received news of regulation of the property market.

Securities dealers Chinese reporters learned from Hefei Housing Authority that on July 30, Hefei Housing Authority and other seven departments jointly held a city-wide real estate market stability control work conference, in which about 40 major development enterprises participated.

The meeting proposed to take timely measures to suspend land supply, pre-sale and online signing for development enterprises that triggered three or more group visits and group complaints and did not have effective solutions. In addition, for problem-prone enterprises, strictly control bank loans, strictly control pre-sale funds and strictly control filing prices.

At the meeting, the contradictions and disputes arising from the delivery of commercial housing and the group visits and complaints caused by these conflicts and disputes occurred in more than 10 enterprises such as contemporary home buyers and Beijing Commercial Company since the beginning of this year were reported. The prominent problems in planning and design, sales promotion and housing quality in the development and construction of real estate were pointed out.

At this meeting, Hefei Housing Administration Bureau requested to "make three rules" with various real estate development enterprises.

In response, Guo Shiying, an analyst at Zhuge Fang's data research center, believes that the focus of the Hefei meeting is to standardize and stabilize the market. We will further prevent and resolve all kinds of contradictions and disputes in the real estate market through strict investigation of all kinds of illegal behaviors of real estate development enterprises, thus stabilizing the real estate market. For housing enterprises that have triggered three or more group visits and have not been effectively disposed of, they are restricted from taking land and selling from the land side and the selling side. The meeting also strictly controlled bank loans, pre-sale funds and filing prices, from the financial and price side. Many aspects strictly control the behavior of housing enterprises and stabilize the market.

Yan Yuejin believes that the expression of "three pauses" mentioned in Hefei policy is a zero tolerance attitude towards this group of visits, and the relevant responsibilities need to be borne by the relevant housing enterprises. In the actual process, many developers ignore the demands of property buyers and ignore the rights and interests of the masses, which can not solve the problem of housing transactions, but also easy to form greater social contradictions. Hefei this time requires developers to form a relatively clear solution, time limit and standard of solution, which is worth learning and learning from relevant cities.

Yan Yuejin also pointed out that in the second half of this year, some housing enterprises may meet the peak of housing delivery, and some real estate projects may have some quality problems. Recently, housing enterprises need to conduct a major overhaul and internal inspection of housing quality, otherwise it is really easy to cause various group visits and complaints. Only by truly protecting the interests of property buyers can the stability of the transaction order be promoted, and the related real estate enterprises will not face the embarrassment of being unable to take land and sell it.

Real estate regulation exceeded 40 times in July

Since July, various real estate tightening policies have been issued intensively. In the last week alone, Suzhou, Luoyang, Hohhot, Dalian, Hefei and other cities have successively increased the regulation of the real estate market, and Kaifeng's cancellation of the sales restriction has been suspended. In addition, the regulatory authorities have continuously tightened the financing of housing enterprises, including trust loans and overseas bond issuance.

According to statistics from Zhang Dawei, chief analyst of Centaline Real Estate, real estate regulation has exceeded 40 times in July and continues to maintain a high level.

"In 2019, the real estate market regulation will be mainly relaxed in the first quarter, and housing will not be sold until the Politburo meeting in April. From the second quarter to July, the real estate policies around the country will be mainly tightened. In recent July, various tightening policies have appeared frequently, mainly to rectify chaos. " Zhang Dawei said that from the cities that issued the regulation policies, the main cities are those with obvious price increases. Such cities are mainly concentrated in the first and second tier cities, and the price of housing has remained at a high level recently, which shows that "stabilizing expectations, land prices and housing prices" is still the main content of the policies.

On July 30, the Political Bureau of the Central Committee of the Communist Party of China made it clear that it would adhere to the position that houses are for housing, not for speculation, implement a long-term management mechanism for real estate, and not use real estate as a short-term stimulus to the economy.

This is after the two Politburo meetings at the end of last year did not mention real estate. On April 19 and July 30, it was mentioned twice in a row that real estate would not be sold. It was further confirmed that real estate control would continue to be tightened. Zhang Dawei believes that under the circumstances of a small spring in the market and fluctuations in some areas, it will be a blow to the real estate speculators and also conducive to the stability of the market to mention twice in a row whether to live or not.

According to the China Index Research Institute, despite the economic pressure in the first half of the year, real estate regulation still reflects the strict tone and the central government's policy of not speculating on housing and stabilizing expectations. The most fundamental impact is that the local government will be more cautious in dealing with the regulation of real estate, avoiding the use of real estate as a short-term stimulus to the economy, and the land finance will be affected to some extent. In particular, regional policies with excessively large fluctuations in land prices will be further tightened. The two-stage financing policy of supply and demand will remain tight.