18/10/2018-3

Will the mainland property market be loosened?

Real estate has experienced a long period of five-limit era, which is a huge pressure on developers. If the five limits are used together and strictly enforced, it is a difficult situation for many developers, especially those who used to sell land at high prices. Because the high price of the land will inevitably rely on selling high prices to turn over, but when the price limit constrains you, you sell high or not, and sell low may make less profit or even lose money. How can it be difficult to find a way out, which is a huge test for developers.

On September 29th, Beijing appeared the first unrestricted commercial housing plot in two years. This is the first time since Beijing adopted the “price limit bidding price” policy in October 2016. After 24 months, Beijing has once again seen residential plots that do not qualify the price of commercial housing in the land supply chain. The pressure to regulate relaxation is there, but it cannot be judged by the individual cities alone, but it cannot be understood as a policy loosening.

The overall situation of the real estate has been set. Under the positioning of “the house is used for living, not for speculation," real estate is no longer able to take the old road of rapid development. It must transition from speed to quality, so Country Garden and Evergrande have slowly abandoned. High circulation strategy. Recognizing the situation, this round of regulation and control will be effective. It is impossible to relax in the short term. Even if it is relaxed, it is not what everyone imagines. The market will have a retaliatory rebound. We must know that the government is using long-term mechanisms to make the market more durable and healthy, such as the circulation, financial, supply, and demand sides, all of which are stuck by policies.

Recently, China-US trade war, bear market rampage, US interest rate hike and China’s RRR cuts, many people expect the central government to relax. Will regulation be relaxed? When do you relax? There may be many people asking this question. The author believes that due to the overcapacity period in the Mainland, the real estate destocking in the third and fourth tier cities is basically up to standard, the demand in the first and second cities is tight, and the economic direction of the mainland is expected to shift to strengthening domestic demand to cross the peripheral trade factors, thereby regulating economic growth. This regulation has not only ended, but there will be more balanced supply and demand policies in the future.