Rise in Chongqings Second-hand Housing Transaction Volume, Listing Volume Surpasses 240,000 Sets Reaching a New High, Homeowners No Longer Haggling over a Few Ten Thousand Yuan, Only Aiming for Quick Transactions, How to Interpret?

The listing prices in the second-hand housing market continue to decline

This is not called a recovery, it is called compromise.

As the number of listings for second-hand houses increases, landlords have to repeatedly reduce their listing prices. Tens of thousands, or even a few hundred thousand, are no longer a concern, they just want to sell quickly.

The second-hand housing market is now essentially dominated by residents' buying and selling behavior, rather than being influenced by policies. In fact, policies often have a reverse effect. Whenever there is a positive policy in the real estate market, the number of listings for second-hand houses will surge. This means that the potential buyers have increased, so why wait to list the house? As a result, the prices of second-hand houses are being trampled upon, forcing landlords to continue lowering their prices.

I have personally gone through this vicious cycle of “the more support, the lower the price, the lower the price, the more support” several times this year. In March of this year, I tested the waters in the second-hand housing market and listed my own house for sale.

Unexpectedly, whenever there is good news in the real estate market, the number of listings in my neighborhood and neighboring neighborhoods would increase dramatically. This forced us to lower the listing price. After four consecutive price reductions, the listing price for my house has been lowered by more than 30%, and it finally sold at the beginning of this month.

The location of my house is considered quite good, with a subway station on the left and a school on the right, and a large commercial complex in front. However, even under these circumstances, it took a hard 8 months to sell, and the deal only happened because the buyer’s child was in a hurry to start school. This indicates how stagnant the market is.

Although I have adjusted the price multiple times, compared to the hesitation in the first half of the year, I am now a typical example of the problem. I no longer want to stress over tens or hundreds of thousands of yuan. I just want to sell as soon as possible. My personal emotions probably reflect the mainstream sentiment in the market. At the same time, this is also my only property in the main city area, and I don’t plan to buy another one after selling, at least not in the short term.

Friends who invest in stocks know that once prices form a trend, it will continue for a long period of time. So, even if the real estate market can return to its peak, it must first go through a long period of stagnation. Even if the real estate market can return to its peak, the timing to make a move should be after the house prices have rebounded by at least 20%. If you want to buy at the lowest point, regardless of success or failure, I can only say that risk and reward are not directly proportional.

Now, with the money from selling the house invested in wealth management products, earning an interest rate of 4% to 5.5% per year, it’s more than enough for me to rent a place that is no less luxurious than my original house, and there is still plenty of interest left. My quality of life has instantly improved. The only thing that makes me a little nostalgic is that I am about to leave this home where I have lived for a long time, and there is inevitably a little reluctance in my heart.

If my wife and family still want to buy a house in the main city area in the future, I still have a lot of room to maneuver. If house prices continue to decline, then I can switch to a higher quality new development; if house prices stabilize or rise, then I will sacrifice the location and choose a higher quality property; if the real estate market goes against the trend and surges, then I will rent for a lifetime.

But objectively speaking, if someone like me ends up renting for a lifetime, then most ordinary people will also end up in the same situation. Even if the house prices soar, they will only circulate within a small range among the upper class, and the houses that can be circulated will be high-quality properties with limited investment value.

Recovery in Chongqing’s Second-hand Housing Market

In just half a month, he reduced the price of the house from 1.52 million yuan to 1.37 million yuan, hoping to close the deal as soon as possible!

Chongqing’s second-hand housing transactions are picking up.

According to Ruili data in Chongqing, in October, the number of second-hand housing transactions in the main urban area of Chongqing reached 9,746, reaching a new high since February of this year. The second-hand housing market is showing obvious signs of recovery, following the trend of the new housing market. According to feedback from several intermediaries, the number of clients visiting second-hand houses has gradually increased in October, and customers' willingness to buy houses has rebounded. Some core area stores have seen significant growth in performance, and market vitality has significantly recovered.

At the same time, with the deepening of a series of favorable policies, the sentiment of “selling off” in the real estate market is gradually diminishing. In October, the market added 23,108 new listings, maintaining a “relatively low level” this year.

Owners are no longer hesitating over tens of thousands of yuan in price reductions

On November 13th, in a community in the RANJIA ba area of Yubei, Chongqing, after much deliberation, Mr. Zhang, an owner, decided to reduce the price of his 88-square-meter three-bedroom apartment to 1.37 million yuan. This is his second price reduction in the half month since listing, and it has decreased by 150,000 yuan compared to the price of 1.52 million yuan on October 28th.

The reason for his decision is the current market conditions.

On the Beike app, there are currently 78 listings for sale in Mr. Zhang’s community, and over 60% of the listings have had their prices reduced in the past month. Only a few listings that are not in a hurry to sell have prices that remain stable, but the number of viewings is significantly lower than that of the properties with price reductions.

In fact, in February and March of this year, the second-hand housing market in Chongqing experienced a “mini spring” due to factors such as the release of previously accumulated demand. According to Ruili data in Chongqing, the only month this year with a second-hand housing transaction volume exceeding 10,000 units was February, with 11,361 units sold, an increase of over 50% compared to the previous month.

However, the market quickly took a downturn, and at the end of March, both the heat and transaction volume of the second-hand housing market in Chongqing started to decline, with a noticeable decrease in the number of customers viewing houses and a drop in transaction prices.

Until August, under the influence of favorable policies from the central government to local governments, owners of improved demand began to accelerate their decision-making for house exchanges. Many second-hand housing owners hoped to seize this opportunity to exchange houses, not only by listing their own second-hand houses but also by no longer hesitating over tens of thousands of yuan in price reductions to close the deal as soon as possible.

At that time, the Chongqing second-hand housing market quickly surged in the short term, with 9,687 second-hand residential properties sold in August, an increase of 36.3% compared to the previous month.

But looking at the market trend, the impact of the new policies has gradually weakened, and the heat and transaction volume have begun to decline gradually.

“In September and October of this year, the overall transaction volume of second-hand houses in Chongqing increased slightly, but the increase was not significant. In November, there has been no significant change in market sentiment, and the increase in new business is still relatively small,” Zhang Qiang (pseudonym), a senior intermediary at Chain Home Chongqing Yubei District, told Economic Daily.

Ruili data in Chongqing shows that the transaction volume of second-hand houses in the central urban area of Chongqing in September and October was 9,726 and 9,746 units, respectively, with a month-on-month increase of about 0.4% and 0.2%, indicating a further decline in market heat.

However, it should be noted that although the increase was minimal, the transaction volume of 9,746 units in October is still the second-highest this year, second only to February.

Continued increase in the number of second-hand homes on the market

Qin Hong (pseudonym), a Chain Home agent, told reporters that based on this year’s transaction prices, the prices of units in the community where Mr. Zhang is located have been on a downward trend since late March. This price trend has continued for half a year. By the end of October, the transaction prices in this community had generally decreased by around 10% from the peak at the beginning of the year.

Several area agents confirmed to reporters the universality of this price trend.

Transaction data from Chain Home also shows that most of the houses sold in October had discounts on the listing price, and only a few properties were sold at a premium or the listed price. Properties with a low listing price ratio mainly fall into two categories: one is small-sized affordable products, and the other is larger-sized improvement-type products.

Data from the National Bureau of Statistics also shows that in October 2023, the average price of second-hand residential properties in Chongqing decreased by 0.7% compared to the previous month, marking a continuous decline for 6 months. On a year-on-year basis, the price dropped by 4.5%.

However, according to Ruili monitoring data, in October 2023, the average transaction price of second-hand houses in the central urban area of Chongqing was 12,893 yuan per square meter, a month-on-month increase of 4.3%, reaching a new high this year. “Demand is gradually being released, market heat is rebounding, and with the dominance of the core area, market prices are steadily rising,” according to analysis by Ruili in Chongqing.

Contrary to the overall downward price trend, the number of listings continued to rise.

According to the Chain Home official website, as of November 20th, the number of second-hand houses listed in Chongqing reached a new high of 244,428. Ruili data shows that from January to October this year, the monthly average number of new second-hand house listings in the central urban area of Chongqing reached 25,101. Among them, the month with the most new listings was March, with 34,326 new listings. However, at that time, the transaction volume was only 9,734, less than one-third of the new listings.

As reported earlier by Economic Daily, by June 27th, the number of second-hand houses listed in Chongqing had already reached 226,234, surpassing the 190,000 mark for the first time on March 12th this year.

However, in October, the number of second-hand houses listed in Chongqing was 23,108, maintaining a “relatively low level” this year, “with the deepening of a series of favorable policies, the sentiment of ‘selling off’ in the real estate market is gradually diminishing,” according to Ruili data. The transaction volume of second-hand houses affects the activity and price trend of the entire subsequent market replacement chain. Whether the second-hand housing market in Chongqing will see a “tail-raise” at the end of the year remains to be seen.

Reporter: Chen Li

Editors: Lu Xiangyong, Chen Mengyu, Gai Yuanyuan

Proofreader: Chen Kename

｜Original Article by Economic Daily NBD News｜

Reproduction, extraction, copying, and mirroring etc. are prohibited without permission

Current Status of the Real Estate Market

In fact, to understand this news, we need to consider the characteristics of the real estate industry. “Golden September and Silver October” is not a joke. If sales are not high during this time, then when are they going to be high?

Real estate transactions often have two peak seasons, one being “Golden September and Silver October” and the other being after the Spring Festival.

In Chongqing, during the early months of the year when the pent-up demand is released and after the Spring Festival peak season, there was a wave of “mini-spring”. The only month this year in which the number of second-hand housing transactions in Chongqing exceeded 10,000 was February, with a total of 11,361 units, representing a growth of over 50% compared to the previous month.

After this wave, the demand has built up again until September and October. Coupled with the recent introduction of various real estate market regulation policies, this is an opportunity for first-time homebuyers and those looking to upgrade, which has driven the number of second-hand housing transactions in October.

When exploring Hongya Cave in Chongqing, it is more convenient to walk back from Chaotianmen Gate! There are too many people in other places!

The market is afraid of losing its vigor, but not afraid of price stalemate in transactions. In the past, when the policy stimulus was just beginning, it was often the most favorable time to buy a house, but as the market gained momentum, prices also rose.

Of course, the current real estate market is different from before. Sellers who list their properties for sale also have to adapt to the situation and make a quick deal. As the real estate market continues to change, prices may further decline. The more the market consolidates, the harder it becomes to sell non-premium properties.

According to the official website of Lianjia, as of November 20th, the number of second-hand housing listings in Chongqing has reached a new high of 244,428 units. Rui Li data shows that from January to October this year, the monthly average number of new second-hand housing listings in the central urban area of Chongqing reached 25,101 units, with the highest monthly increase in listings in March, reaching 34,326 units. However, the number of transactions during that period was only 9,734 units, less than one-third of the number of listings. According to a previous report by “National Business Daily”, as of June 27th, the number of second-hand housing listings in Chongqing had already reached 226,234 units, and it only exceeded the 190,000 mark for the first time on March 12th this year. However, in October, the number of second-hand housing listings in Chongqing was 23,108 units, maintaining a relatively low level throughout the year. “With the deepening of a series of favorable policies, the sentiment of ‘selling off’ in the real estate market has gradually diminished.” Rui Li data shows that the volume of second-hand housing transactions affects the subsequent activity and price trend of the entire market’s replacement chain. Whether the Chongqing second-hand housing market will experience a “year-end surge” remains to be seen.

The water in the Jialing River is very green.

With such a high number of second-hand housing listings in Chongqing, the price difference in Chongqing’s property market seems to be relatively small, with prices being relatively average. At this stage, second-hand homeowners must act quickly. Otherwise, they will have to rely on the continuous influx of population into Chongqing in the future to slowly resolve their holding.

I feel that Raffles City is blocking the dock!

Housing Regulation and Market Differentiation

The prolonged real estate boom has deeply ingrained the idea of rising housing prices in people’s minds. Unlike new homes, the price of resale homes is basically negotiated between the buyer and seller. Under the expectation of price increases, sellers are reluctant to sell at lower prices while buyers reluctantly accept higher prices, resulting in an unequal transactional position between the two parties.

Unfortunately, the good times of blindly developing and rapidly rising housing prices have come to an end. The exorbitant prices have left people sighing with regret, and the “buy when prices rise, don’t buy when prices fall” mindset has also suppressed non-rigid demand. Once divorced from its investment attributes, most properties will embark on a long journey of value regression, leading to a shift in the overall supply-demand relationship.

For some homeowners who want to sell their old properties to buy new ones or need to cash in urgently, reducing the price for sale becomes a practical and inevitable choice.

Fortunately, for major cities like Chongqing, the long-term existence and continuous attractiveness of residential value ensure that houses can still be sold even if their prices are lowered. Various stimulating policies can also play a bottom-supporting role, promoting a portion of purchasing demand and achieving dynamic equilibrium at a reasonable average price level. However, for smaller cities with weak industries and population outflow, it may be a situation where there is a price but no market.

The road to homeownership is not easy, especially in large cities.

Difficult for Chongqing property prices to rise in the future, unfavorable market conditions.

Compared to the rest of the country, property prices in Chongqing are not very high. However, the local residents have low incomes, and there is still a lot of land in Chongqing. It is really difficult for prices to rise in the future. People in Chongqing are indulgent, enjoying good food and having fun. They don’t really care whether they live in a good house or not.

Chongqing ranks first in the country in terms of second-hand housing, and it is a city with a net outflow of population. The fundamentals cannot support the logic of rising property prices in Chongqing. The price surge 15 years ago was also driven by outsiders. However, it ended up trapping many speculative investors from outside. It was still too polite. When they sensed a big market, homeowners were reluctant to sell and potential buyers were in a panic. Buyers can look at 10 houses in a day, while sellers may only have one person coming to view their house in a week. Buyers can confidently negotiate a price reduction of at least 20% -30% from the listing price. If the homeowner is motivated to sell, then further discussion can be had. Rest assured, homeowners who are truly motivated to sell are definitely calmer than you buyers looking to purchase a house.