Talent War Could Cause Housing Shortages in Some Cities

No wonder the CCP is happy with the current state of the real estate market. Between tight controls and talent wars, some markets may experience housing shortages.

The grab war referenced below is the talent war, grabbing people.

Aside from being a real estate issue, it again highlights the big difference between Chinese and American development policy. The "demographic deficit" is driving up the value of native workers in China and driving it down in the USA. Wages are up and relative housing costs down in China. Cities offer rent subsidies and even pay worker's taxes for them! In the USA, mass immigration drives down wages and drives up real estate costs, in addition to creating all manner of externalities that are costs for natives. In both cases, there is a "haves and have nots" situation. The best run cities win in China and those left behind don't benefit. But there are areas of the USA left behind as well, and unlike in China, young people who move to the city aren't given a basket of goodies for doing so, instead they have to move into a slightly less worse situation. Clearly, China's policy will run into some issues, but on the whole, it is a far more intelligent development strategy for the long-term, for social stability alone.

iFeng: 百城加入“抢人大战”行列 多城或面临“房荒”困局
From the first-tier and second-tier cities to the third-tier and fourth-tier cities, the "talent battle" has intensified in all cities across the country in recent years. According to the latest “Personnel Policies and Anju Employment Report 2019” (hereinafter referred to as the “Report”) released by 58 cities and Anjuke, more than 100 cities including Tianjin, Shenzhen, Guangzhou, and Nanjing have introduced talent policies throughout the country this year. New settlement policies have been introduced in 30 cities.

"Daily Economic News" reporters noticed that in this "grabbing war", Xi'an, Ningbo, Ma'anshan, Changsha and other cities have made regulations on talent policies, housing purchase and sales behavior. Obviously, these cities are trying to attract talents by lowering their entry thresholds, raising housing purchases, and renting subsidies.

However, will this "talent battle" be transmitted to the real estate market? Are the purchase restriction gates in various places being opened in disguise? With the influx of new populations, will these cities face the problem of “housing shortage”?
"Grab the War" to further upgrade

The most direct impact of the implementation of talent policy is the growth of the population.

Around 2010, with the rapid economic growth, the population of large domestic cities has grown rapidly, and the average annual growth of the permanent population has almost exceeded 100,000. From 2012 to 2016, the population growth of large cities has slowed down relatively, including Hangzhou, Nanjing, Suzhou, Xi'an, Hefei and other cities. The average annual net population growth of only tens of thousands of people, close to the natural population growth rate.

Since 2017, many large cities have introduced talent settlement policies, which has led to rapid population growth. For example, in Xi'an, the relaxation of college graduate registration policies in 2017 increased the household registration population by the end of the year. At the beginning of 2018, Xi'an again relaxed the settlement requirements and allowed immediate family members to move with their families. The population growth of household registration accelerated again, and the household registration population increased by 70 at the end of 2018. More than 10,000 people. Wuhan, Hangzhou, Nanjing and other cities also introduced a large population through talent policies in 2017 and 2018.
Some cities are even paying taxes for younger workers:
The "Report" shows that in addition to regular settlement and subsidies, some cities have introduced more personalized policies. Take Guangzhou as an example. For overseas high-end talents and talents in short supply who work in the Greater Bay Area, the portion of the personal income tax paid in the nine cities of the Pearl River Delta that has paid more than 15% of their taxable income is calculated by The People's Government of the Nine Triangle Areas provides financial subsidies that are exempt from personal income tax.
Some cities may face "housing shortage"

The entry of a large number of new people will inevitably stimulate the supply and demand of the local property market.

According to incomplete statistics, there are currently nearly 40 cities that have introduced talent purchase policies. Hot cities are in full swing, and more cities have yet to wake up. The urban population battle has just begun and is far from over.

The "Report" shows that many cities have made special provisions on talent purchase policies this year. For example, Hainan has introduced policies to reduce the number of years of social security or individual taxation for housing purchases to one year from the original two or five years for all kinds of talents actually introduced and working in Hainan but not yet settled.

When these cities open their arms to people, their attention has naturally increased. From the aspect of living, according to the data of 58 city and Anjuke platform, from January to October 2019, the number of new house visits in Xi'an, Chongqing, Wuhan, Chengdu and other cities is much higher than that of first-tier cities. , Wuhan, Shenyang, and Ningbo all visited more than 20% of the heat.

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