Home Prices Won't Rise: Jawboning or Hammering Home Credit Policy?

Policy is loosening, the war for population is underway and credit growth/economy has picked-up, and there's an endless stream of articles saying home prices will remain stable. Is the government jawboning the market because it worries about credit flowing into real estate, or is the government sticking to its policy and hammering home the reality of slower credit growth?

The latest entry at iFeng: 多城市限售楼盘“解冻”，对市场影响大吗？

Up to now, among the first cities in the city that have imposed restrictions on sales, the “frozen” real estate will be “thawed” one after another, entering the market, and there are also rumors that “some houses can be listed or will hit the market”.

In this regard, a number of industry experts generally said in an interview with reporters that the matter has little impact on the market.

It's all about credit growth. The government's policies only serve to distort speculative activity. Instead of in this city, that city. Instead of illegal down payments via pawnbrokers and P2P lending, fake divorces.

Zhang Dawei, chief analyst of Zhongyuan Real Estate, said that the recent “Xiaoyangchun” speculation in the property market has caused property market volatility, and some cities have issued regulatory policies in time to stabilize market expectations.

According to his analysis, the real estate regulation in 2019 mainly depends on the credit policy. Zhang Dawei expects that most cities will not be allowed to cancel the sale, and the entire market will continue to develop steadily.

The reporter learned that the market generally expects that the high pressure of real estate regulation this year has not been lifted. If the real estate sales in first- and second-tier cities are excessively heated, it may even trigger real estate regulation to tighten again.

According to the CIC Research Report, the full-caliber sales of the top 100 real estate enterprises in the first quarter of 2019 reached 2,110.79 billion yuan, an increase of 8.2% year-on-year. The growth rate turned positive year-on-year, a sharp increase of 11 percentage points over the previous two months.

In March, the top 100 real estate enterprises achieved sales of 936.47 billion yuan, a substantial increase of 26.2% year-on-year. The monthly growth rate was 29.3 percentage points higher than that in February.

The reason is that the supply of real estate market in some first- and second-tier cities has increased. The concentrated push of housing enterprises after the Spring Festival has led to a significant rebound in transaction volume. The sales in March increased by 82.5% from February.

It is precisely because of the warming of the market that some experts have expressed that they do not have to worry about the “thaw” of restricted sales, which may lead to “selling tide”.

Yan Yuejin, research director of the Yiju Research Center think tank, told reporters that "if housing prices continue to fall, there may be a wave of selling. But the recent rebound in the property market means it will not happen this time."