How Will China Open? Short-Selling Banned, 10 Cities Have Zero Real Estate Transactions

Update: Short selling is banned when the market opens today.

The A-shares ETF in the U.S. (ASHR) closed at $26.42 on Friday. The NAV of the fund was $28.95. The market is pricing in an 8.7 percent decline in Chinese shares. Over the weekend, I posted Coronavirus Case Growth Slows on February 1 and also Good News: Case Growth Drops, Chinese Quarantine Working. The data shows they are probably turning a corner on the coronavirus outside of Hubei province. If that remains true, I suspect investors will start buying the dip. However, the impact is not simply from the virus, but the secondary and tertiary effects of quarantine. Outside of China is a bigger question mark. Has the disease gained a foothold in other emerging markets, Europe, Japan and the U.S.? If yes, more travel restrictions and even quarantines could follow, sinking the global economy. Even if you were a pie-eyed optimist on China, that doesn't mean China's economy is out of the woods. As for economic impact, the housing market could be feeling the effects for months.

iFeng: 春节与疫情叠加，武汉等十城春节假期二手房零成交

Affected by the epidemic of the new type of coronavirus during the Spring Festival holiday, the transaction in the existing home market in key cities decreased significantly. Zero transactions in existing homes occurred in ten cities including Wuhan, Hangzhou and Jinan during the Spring Festival holiday.

...Among them, Wuhan City was most affected by the impact of the epidemic. In January, the transaction volume of existing homes in Wuhan Chain fell by 51.3%. The transaction volume of existing homes in Yantai and Qingdao chain fell by 48.2% and 46.8%. Beijing's existing homes network in January signed 8,554 units, down 39.6% from the previous month. The real-time transaction volume of Beijing Lianjia's existing homes fell 35.1% month-on-month.

From the time period of the Spring Festival holiday this year (January 24-30), the volume of the Spring Festival holiday this year decreased by 61% compared to last year's Spring Festival holiday (February 4-February 10). This year, Hangzhou, Jinan, Langfang There are 10 cities in Nanjing, Qingdao, Tianjin, Tianjin, Wuhan, Xi'an, Yantai and Changsha with zero transactions during the Spring Festival holidays.

Recall that cities ordered real estate office shut. Home sales should recover once the virus passes.

Xu Xiaole, chief market analyst of the Shell Research Institute, pointed out that due to the uncertainty of the development of the epidemic, the time to resume sales is yet to be determined. It is expected that in the first quarter of 2020, the transaction volume of existing homes in key cities will decline significantly. The "Little Spring" of the property market in March and April is unlikely to occur, and the impact of the epidemic on the market will continue to at least the first half of the year.

From the perspective of the new house market, affected by the epidemic in Wuhan, sales offices in many places have been closed since late January, and new house sales have almost stopped.
According to the data released by Kerer, China's top 100 real estate sales companies had a monthly sales volume of 509.705 billion yuan, a year-on-year decrease of 12%.