Golden Week Home Sales Slow, Shenzhen Records Four Existing Home Sales

iFeng: 惊呆！深圳二手房凉了？国庆期间仅成交4套 新房也在打折促销…

New home sales were strong in Shenzhen, but that was boosted by huge price cuts:

According to data from Shenzhen Centaline Research Center, during the National Day this year (October 1st to October 7th), the transaction of new houses in Shenzhen was 1081, a year-on-year increase of 163%. However, in the eyes of industry insiders, there may be reasons for the delay in online signing of this data.

Recently, the supply of new houses in Shenzhen has increased sharply, but the "new craze" has been uneven. There are not only the new “Sunlight” of Shajing Internet celebrity, but also the price-cutting promotions of rigid demand and investment disks that have attracted attention. In particular, Kaisa Yiduhui, located in Buji, Longgang District, became the focus of Shenzhen's property market during the National Day. Recently, Kaisa Yiduhui launched a second- and third-level linkage to launch a discounted house purchase activity. The original house price of 1.2 million yuan once dropped to 750,000 yuan, with an average price of about 19,000 yuan per meter, which maxed out the real estate agency’s WeChat circle of friends.

Shenzhen saw only four existing home sales recorded during the holiday week:

In terms of second-hand housing, there were 4 transactions in Shenzhen during the National Day, with a total of 351.22 square meters. This figure hit a record low for many years, and during the National Day holiday last year, due to the impact of regulatory measures, the volume of second-hand housing transactions in Shenzhen also fell by nearly 47% year-on-year. In addition, data from the Shenzhen Association of Real Estate Agents shows that from September 27 to October 3, Shenzhen's second-hand housing network signed only 303 sets, a decrease of 18.5% from the previous month.

"Most of our store managers choose to take vacations because business is very poor." In the Futianyuanling area, a real estate agency manager told reporters that there were not as many customers as usual, and with the increase in new houses, second-hand houses almost entered. Quick freezing period.

Yan Yuejin, research director of the Think Tank Center of E-House Research Institute, said that there is no need to be overly pessimistic about the current real estate market. The recent credit policy can be considered to have ushered in an inflection point. Although the interest rate decline is not obvious, it is expected that the bank quotas will increase in the fourth quarter, which will obviously help support the market transaction volume. At the same time, judging from the actual process, under the control of various policies in the third quarter, there were obviously fewer actions to buy houses into the market, and various wait-and-see sentiments increased. With the advent of the fourth quarter, various types of housing demand will continue to be released, which will also help various housing companies to destock their projects. Based on this, it can be considered that although the market is still showing signs of fatigue during the November holiday, the pessimism has been significantly reduced.

Dongguan also cooled.

iFeng: 房价直接腰斩？东莞发布二手房指导价 楼市寒冬何时过境?

According to data from the Zhuge Housing Search Data Research Center, 48 second-hand houses were sold in Dongguan during the Mid-Autumn Festival this year, while only 27 units were sold in Dongguan during the "October" holiday. The transaction volume fell 44.3% compared with the Mid-Autumn Festival holiday and 88.9% compared with the same period last year.

Zhang Dawei, chief analyst of Centaline Real Estate, believes that preventing the property market from cooling too quickly is likely to become a future policy trend. In the past two years, the property market has become more and more stringent. On the one hand, there is a “price limit order” for new and second-hand houses in hot cities. Obviously, a sharp rise in housing prices will amplify financial risks, and housing prices are also unstable when they are too fast. Recently, many cities across the country have issued "restriction orders". On the surface, some real estate companies are rushing away under the high pressure of debt. In fact, it further shows that "stability" is the most certain keyword in the property market.

ZH: "Catastrophic" Property Sales Mean China's Worst Case Scenario Is Now In Play

With that preamble in mind, we bring readers' attention to a little noticed report in Shanghai Securities News, citing China Real Estate Information Corp. research (link), which revealed that more than 90% of China’s top 100 property developers’ sales declined in September by an average of 36% from the same period last year. According to the report:

Sept. sales totaled 759.6b yuan ($118BN), down 36.2% from September 2020 and 17.7% lower from the same period in 2019, deepening a downward spiral that started in July

Among companies, 60% of developers saw sales decrease by more than 30% y/y in Sept.

Beijing, Shenzhen and Guangzhou saw transaction volume of residential properties decline 30% y/y, while Shanghai fell 45%

Real estate is the bubble in China. It is backed with enormous levels of debt that are implicity guaranteed by the state. China's wealth gap is also expressed more intensely as unaffordable real estate. China doesn't want home values to fall, but it also doesn't want home values to rise faster than wages. It is trying to control home prices by whatever means it can. China hasn't found a way to keep capital flowing into real estate without restricting credit though, and now they're restricting access to all manner of investment products that allow capital flight in any form. That looks like the behavior of a state that is contemplating a currency devaluation or policies they know will invite capital flows into foreign currencies and commodities.

Chinese consumers are also retrenching according to the central bank's quarterly sentiment survey.

iFeng: 央行报告：储蓄意愿上升 投资、消费意愿下降！银行家企业家这样看经济

In the third quarter, urban depositors' attitudes towards consumption, savings and investment also changed. On the one hand, 50.8% of residents tend to "save more", an increase of 1.4% from the previous quarter; on the other hand, residents who tend to "consume more" accounted for 24.1%, a decrease of 1.0% from the previous quarter; Residents who “invest more” accounted for 25.1%, a decrease of 0.4 percentage points from the previous quarter.

All this is happening in the context of rapidly deteriorating U.S.-China relations. Remember the good old days when trade, not regional war, were the topic du jour? Up until and incluiding the 2016 Shanghai agreement, China and the U.S. worked together with other central banks to avert a finanial crisis. With tensions frayed and U.S. leadership collapsing, if somethihng breaks this time, it might stay broken.