The housing prices in Guangzhou have fallen for 12 consecutive months, with some new properties requiring only a 12-yuan down payment. What impact will this have on the real estate industry? Will the prices continue to fall?
Original： 原创 中房报 中国房地产报 “政策还有发力空间。中房报记者曾冬梅丨广州报道1月17日，国家统计局发布的房价数据显示，广州房价依然处于下行通道，2023年12月环比、同比分别下降1%、3%。2023年，广州打响了一线城市放松住房限购的第一枪，并率先下调二套房首付比例至40%，还取消土地出让的价格限制，希望提升各方预期。但市场的反应平平，截至2023年12月，从环比来看，广州的新建商品住宅销售价格已连续下跌7个月，同比下跌的周期更长，达12个月。“还是很难，没有什么起色，只有准现楼才卖的稍微好点。”谈及最近的销售状况，广州某房企营销人员如此表示。为打破市场僵局，有些房企采取了非常规的销售手段，如，增城区的一个在售项目近期推出了一批特价房，首付只需要12元。 ━━━━ 房价跌了一整年 从国家统计局的数据来看，2022年12月，广州新建商品住宅销售价格以环比下跌0.4%、同比上涨0.4%收官。2023年1月则以环比0.2%、同比0.3%的跌幅开局，2月份，房价开始环比小幅上涨，涨势一直保持到了5月份，最高月涨幅为0.3%。6月份便掉头向下，且环比跌幅逐渐扩大，从0.1%扩大到了12月的1%。同比的数据曲线更是一路下行，2023年，广州12个月的新建商品住宅销售价格同比都是下降的，最大的降幅也出现在12月，同比下降3%。新房价格的下跌尚未对成交量发挥明显的刺激作用。根据中原地产研究发展部的统计，2023年广州一手和二手住宅累计成交约18.1万宗，同比上升16%，但跟2020年的23.2万套、2021年的22.7万套相比，仍有不小差距。2023年，广州的一手房成交了72246套，二手房约10.9万套。二手房的成交量同比大涨31.7%，原因是广州的刺激政策密集出台，加上开发商出险、供应减少，导致买家对新房的信心不足，倒逼客户转至二手市场。一手房的成交量同比减少690套，降幅约在0.09%，对比2022年34%的同比跌幅，已有大幅改善。2023年，广州房地产政策调控逐步放宽，上半年以带押过户、公积金、人才入户等政策温和刺激楼市，下半年政策力度加大，自“认房不认贷”后，相继在限贷、限购、二手房交易等方面解绑，盘活市场流动性。据克而瑞分析，广州的新房市场全年共出现两次脉冲行情。热度集中于2月至3月，受疫情抑制的购买力集中释放，这两个月该公司重点监控项目的周均来访约30769组，成交约1874组，4月开始来访成交明显回落，之后整体保持低位平稳态势，仅“五一”及国庆节等少数重大营销节点短期微涨。8月30日的认房不认贷及9月20日的优化限购两大利好出台后，市场再度复苏，但持续性不足，热度回升周期不足一个月。在整体低迷的市场中，豪宅的表现颇为抢眼，2023年，广州总价在1000万元以上的豪宅成交达4835宗，同比增幅45%，仅琶洲上品一个项目就卖了170亿元。 ━━━━ 新房首付只要12元 对开发商而言，去化依然是个头疼的问题。据克而瑞观察，2023年，广州新房的开盘、加推各项指标均降至近五年最低，全年推货量不足3万套，同比下降13%，当日认购量5215套，同比大降近四成，整体去化率仅18%，尤其是下半年客户消耗严重，大部分开盘销情不及预期。因为新货供应减少，相对2022年，广州的库存规模及去化周期小幅改善，截至2023年末，库存量约1232万平方米，去化周期接近20个月，仍处于高位区间。广州房价连跌12个月 有新盘只需12元首付_同比_政策_楼市Translation：Original： Original China Real Estate Report “Policy still has room for improvement. China Real Estate Report reporter Zeng Dongmei | Guangzhou News On January 17th, the housing price data released by the National Bureau of Statistics showed that the housing prices in Guangzhou are still in a downward trend, with a month-on-month and year-on-year decline of 1% and 3% respectively in December 2023. In 2023, Guangzhou fired the first shot among first-tier cities to relax housing purchase restrictions, and took the lead in lowering the down payment ratio for second homes to 40%, and also canceled the price restrictions on land transfer in the hope of boosting expectations from all parties. However, the market’s response has been mediocre. As of December 2023, from a month-on-month perspective, the sales prices of newly-built residential properties in Guangzhou have been continuously falling for 7 months, and the year-on-year decline has been even longer, reaching 12 months. “It’s still very difficult, there’s no improvement, only quasi-ready-to-sell properties are selling slightly better.” Speaking of the recent sales situation, a marketing personnel from a Guangzhou real estate company said so. In order to break the market deadlock, some real estate companies have adopted unconventional sales methods, such as a project in Zengcheng District recently launched a batch of special-priced homes, with a down payment of only 12 yuan. ━━━━ Housing prices have fallen for a whole year. According to the data from the National Bureau of Statistics, in December 2022, the sales price of newly-built residential properties in Guangzhou fell by 0.4% on a month-on-month basis and rose by 0.4% on a year-on-year basis to close the year. In January 2023, it started with a month-on-month decline of 0.2% and a year-on-year decline of 0.3%. In February, housing prices began to rise slightly month-on-month, and the upward trend continued until May, with the highest monthly increase of 0.3%. In June, it turned downward, and the month-on-month decline gradually expanded from 0.1% to 1% in December. The year-on-year data curve has been declining all the way. In 2023, the sales prices of newly-built residential properties in Guangzhou have all declined for 12 months, with the largest decline appearing in December, down 3% year-on-year. The decline in new home prices has not yet had a significant stimulating effect on transaction volume. According to statistics from the Research and Development Department of China Real Estate, in 2023, there were approximately 181,000 transactions for both new and second-hand residential properties in Guangzhou, a year-on-year increase of 16%, but still a significant gap compared to 232,000 units in 2020 and 227,000 units in 2021. In 2023, 72,246 first-hand homes and approximately 109,000 second-hand homes were sold in Guangzhou. The transaction volume of second-hand homes increased by 31.7% year-on-year, mainly due to the intensive introduction of stimulus policies in Guangzhou, coupled with developers' cautiousness and reduced supply, which led to a lack of confidence in new homes among buyers, forcing customers to turn to the second-hand market. The transaction volume of first-hand homes decreased by 690 units year-on-year, with a decrease of about 0.09%, a significant improvement compared to the 34% year-on-year decline in 2022. In 2023, Guangzhou’s real estate policy control gradually relaxed. In the first half of the year, policies such as bringing in the mortgage with collateral, using the housing provident fund, and attracting talent to settle in were mildly stimulating the property market. In the second half of the year, the policy became more intense, and after the introduction of the “recognizing houses but not loans” policy, it successively unblocked in terms of loan restrictions, purchase restrictions, and second-hand housing transactions, revitalizing the market’s liquidity. According to analysis by Ke Er Rui, Guangzhou’s new home market experienced two pulses throughout the year. The heat was concentrated from February to March, when the purchasing power suppressed by the epidemic was concentratedly released. During these two months, the company monitored an average of about 30,769 weekly visits to key projects, with about 1,874 transactions. Starting in April, visits and transactions began to decline significantly, and then overall remained stable at a low level, with only a short-term slight increase during a few major marketing events such as the May 1st and National Day holidays. After the two major favorable policies of “recognizing houses but not loans” on August 30th and the optimized purchase restriction on September 20th were introduced, the market recovered again, but the sustainability was insufficient, and the rebound period was less than a month. In the overall sluggish market, luxury homes performed remarkably. In 2023, a total of 4,835 luxury homes with a total price of over 10 million yuan were sold in Guangzhou, a year-on-year increase of 45%. Only one project in Pazhou Shangpin sold 17 billion yuan. ━━━━ New homes require only 12 yuan for the down payment. For developers, inventory clearance is still a headache. According to Ke Er Rui’s observation, in 2023, various indicators for the opening and promotion of new homes in Guangzhou all dropped to the lowest level in nearly five years, with an annual sales volume of less than 30,000 units, a year-on-year decrease of 13%, and a daily subscription volume of 5,215 units, a year-on-year decrease of nearly 40%. The overall clearance rate is only 18%, especially in the second half of the year, customer consumption is severe, and most of the opening sales are lower than expected. Due to the reduction in new supply, the inventory scale and clearance cycle in Guangzhou improved slightly compared to 2022. As of the end of 2023, the inventory volume is about 12.32 million square meters, and the clearance cycle is close to 20 months, still in the high range. Guangzhou housing prices have fallen for 12 consecutive months, and some new projects only require a down payment of 12 yuan. ━━━━ Year-on-year Policy Real Estate Market
Analysis of Housing Market Trends and Policies in Chinese Cities
Several points worth discussing:
- A continuous decline for 12 months signifies that the policy requirements for “Phased Cancellation of the Minimum Interest Rate for First Home Loans” will soon be met. As a strong economic region in the southern part of the country, Nanjing, the capital city, has already begun to implement this policy. Guangzhou, being an early adopter among first-tier cities to use housing loan interest rates to stimulate the economy, made a breakthrough in September this year. The first home loan rate in Guangzhou broke through the LPR lower limit, becoming the first first-tier city to do so. The latest policy states that for Guangzhou residents without a house, the down payment for the first house is 30%, with an interest rate of LPR - 10%, i.e., 4.1%. Moreover, the criteria for identifying a first home have been revised and interest rates have been lowered. For Guangzhou residents with one house that is either fully paid off or not on mortgage, the second home can be purchased with a 30% down payment and an interest rate of LPR - 10%. If a Guangzhou resident has one house with an ongoing mortgage, the down payment is 40%, with an interest rate of LPR + 30BP, i.e., 4.5%.
Is that all? No, further breaks in the interest rate lower limit are possible if there’s a continuous year-on-year and month-on-month decline. Guangzhou could first adjust to the national common lower limit of LPR - 20bp. If face-saving measures are maintainable, it might become the first among first-tier cities to dare to implement the “Phased Cancellation of the Minimum Interest Rate for First Home Loans”. This policy is intended for cities with excessively falling housing prices and high risks, depending on whether they prioritize face or substance.
The large base effect of price reductions in first-tier cities is significant. Discussing a financial product crisis in Shenzhen today, many are engaging in mortgage loans due to the high valuation of these ‘broken’ houses. High valuations and selling prices mean that even a 5% drop represents a significant loss of paper wealth. Often, this wealth was never truly generated, resulting in the greatest losses for investors at high positions. In first-tier cities, house prices often range in the millions or tens of millions of yuan. A 10% decrease equates to the price of a house in a fourth- or fifth-tier city. Remember, the purchasing power is still in yuan. Many of China’s so-called middle class, apart from their houses, are in debt, especially those who leverage to the extreme for investment. Leverage can magnify gains in a rising cycle and magnify losses in a downturn, a double-edged sword. Interestingly, do some still believe that housing prices will always rise? Pessimists might even cause prices to fall below practical value.
The booming sales of luxury houses are similar to global monetary policy and monetary transmission. In our case, it’s mostly indirect benefits. We only see banks providing money on a large scale and governments accruing significant debt, but most people don’t feel nourished by these policies. However, this doesn’t prevent a minority from profiting. Who are the ones most keen on advocating and promoting massive monetary easing? Loose monetary and fiscal policies with extremely low efficiency only exacerbate wealth inequality and uneven distribution. If it’s just targeted cash distribution, it might be better not to use these two stimulus policies, as history has shown that overuse can have significant costs.
But have you ever seen a Ponzi credit scheme sustained without ordinary people picking up the tab? The current situation is just like this. No matter how hot the luxury house market is, if the base of the pyramid is hollow, the real estate bubble remains a castle in the air. When the supply-demand relationship reverses, the market will adjust itself. Either potential buyers' incomes are increased, or housing prices and costs (interest) are reduced to a range affordable for the actual demand. Isn’t that a good thing? Let’s not always talk about the cost of decline. Continuous rise hasn’t brought relief to the masses, especially the pressure on young people.
- The popularity of near-ready houses is inevitable. The characteristic pre-sale system essentially relies on unstable credit to support extremely uneven distribution of rights and obligations. Profits are taken away while risks are completely transferred to residents. Once there’s a credit default, no one dares to play along anymore unless it’s near-ready or ready houses. Therefore, it’s imperative to try ready house sales at this stage, which is inevitable following market credit defaults. Is your credit still valuable?
In summary, the market’s self-correcting post-boom clearance is inevitable, and policies can only slow down the decline. To make a change, it’s necessary to start from the demand side’s most concerning issues. No matter how many policies are introduced on the supply side, the market’s response might still not be very optimistic. At this stage, it’s a choice between face and substance, bubble and pragmatism.
Analysis of Risky Real Estate Practices in Guangzhou
Guangzhou, known as the first-tier city that pioneered the issuance of housing tickets (Jinyuan Quan), has recently caught attention with a real estate project offering a 12-yuan down payment. The project, named ‘Oceanus Tiancheng’, is developed by Oceanus Real Estate, incidentally the first state-owned real estate company in China to face a financial crisis. These two ‘firsts’ coming together hardly seem like a harbinger of good news.
The 12-yuan down payment is a classic case of high appraisal and high loan practices, involving fake contracts. Interestingly, a recent revelation about a property in Shenzhen, neighboring Guangzhou, saw its valuation drop from 6 million to just over 2 million yuan.
The scheme works by inflating contract prices. A property, originally priced at 16,500 yuan per square meter, covering an area of 69 square meters and totaling 1.1385 million yuan, is contracted at 23,900 yuan per square meter, increasing the total price to 1.6491 million yuan. With a 30% down payment, a bank loan of 1.1543 million yuan can be secured, which is even higher than the actual total price of the property. In this case, the developer returns the entire 30% down payment of 494,700 yuan to the buyer in cash, effectively reducing the down payment to zero. The touted 12-yuan down payment is merely a misleading figure thrown in by the developer to avoid accusations of fraud. In reality, if one negotiates well about channel rebates, the developer might even end up paying the buyer.
This method is undoubtedly a violation of banking loan regulations and poses potential risks for both developers and buyers.
For buyers, this practice maximizes leverage, putting them at risk of default if their income is affected.
For developers, returning the 30% cash payment is an illegal act. Accounting it under marketing expenses clearly exceeds the deductible limit for land appreciation tax, which means the developer is liable for this tax again.
Such blatant rule-breaking, widely publicized, suggests tacit government approval. Considering that this is happening in a city known for its unconventional approach to housing finance, such regulatory violations may not seem surprising.
Who dares to buy?
The gentleman who bought it can come out and share their experience.
Certainly, it’s going to drop. Fasten your seatbelts, okay?
You can’t kill a pig like this.
There is still room for policy to exert more force.
Well, there is still some room for housing prices to drop.
A 12 yuan down payment? It doesn’t really have any impact.
“It’s still quite challenging, no improvement to speak of, only slightly better sales for off-plan properties.”
The slightly better sales for off-plan properties indicate that even those who are genuinely buying houses have lost trust in pre-sale properties.
It seems so!
When discussing recent sales conditions, a marketing professional from a certain real estate company in Guangzhou said so. To break the market stalemate, some real estate companies have adopted unconventional sales methods, such as a recent release of discounted homes in the Zengcheng District, where the down payment is only 12 yuan.
Inevitable Continued Decline: A Bleak Outlook for Guangzhou
The housing market in Guangzhou is bound to continue its downward trend. In fact, there’s not much to analyze – the economic prospects of Guangzhou are bleak, as evident when you open job search platforms. Without a strong economic foundation, housing prices are bound to fall. Even essential services like healthcare and education rely heavily on government funding. Look at the so-called “Guangzhou landlords” who wear slippers while collecting rent and enjoying rice noodle rolls, they don’t care if Guangzhou is still considered a top-tier city; they can’t sustain this facade for much longer.
Take a look at places like Panyu, Wanbo, and Pazhou – how many of those impressive office buildings are occupied by companies? Wanbo claims to be the second CBD of Guangzhou, but beneath the fancy office towers, you’ll find walls plastered with psoriasis ads for small rental spaces. It’s truly a farce. People often say that Shenzhen’s property market is cutthroat, but if you look at Guangzhou’s recent speculative frenzy, it’s even more exaggerated. The real downward spiral in prices hasn’t even begun yet.
Many people overlook the fact that Guangzhou was one of the earliest cities in the country to loosen property regulations. It was among the first-tier cities to introduce real estate stimulus policies, and property tickets are still being promoted in Guangzhou. It’s clear to anyone with a discerning eye that Guangzhou is in a hurry because it heavily relies on land-related revenue. Other industries have little hope left. In this context, you can still hear some Guangzhou residents saying they don’t care if the city is considered top-tier. Well, do you not care, or does nobody care whether you care or not? The rise and fall of cities are ongoing processes, and even if no city replaces Guangzhou, it’s drifting further away from the leading trio of Hangzhou, Chengdu, and Chongqing, and getting closer to them.
Guangzhou Real Estate Market: Facing a Bleak Outlook
If you had the choice between buying a house in Guangzhou for 5 million yuan or in Foshan for 3 million yuan, what would you choose?
If you have a functioning brain, most would opt to buy a property in Foshan and rent one in Guangzhou. This combination is still more cost-effective than buying in Guangzhou.
Currently, some still believe that properties in super first-tier cities hold investment value, which is why Guangzhou’s housing prices can stand out while others fall.
However, we must face the reality that Guangzhou’s housing prices are exorbitant. Even with a monthly salary of 40,000 yuan (equivalent to an annual income of 480,000 yuan), you may still struggle to independently buy a new house (it would take at least 10 years without any other expenses, not factoring in mortgage interest).
The prices of new homes in Guangzhou have reached a point where it’s nearly impossible to afford one without selling your existing property. In fact, the prices of second-hand homes in Guangzhou have already plummeted significantly. Some high-quality, relatively new homes are even approaching the 3 million yuan mark. This highlights the pressing issue of high housing prices in Guangzhou.
In the past, the reason for buying property in Guangzhou was to secure urban household registration, access quality schools for children, and ensure healthcare for the elderly. But now, with the implementation of equal rights for renting and buying, the urgency to purchase a property has diminished. Moreover, with the sharp decline in property prices in the surrounding areas, are young people still willing to be taken advantage of as naive buyers?
The problem of high housing prices in Guangzhou has become increasingly prominent, and as a result, there is a stronger trend of population outflow. With most people unable to afford homes, they are inclined to purchase properties in the outskirts, and properties in the core areas receive less attention. Consequently, the support for housing prices continues to decline.
The reason Guangzhou’s housing prices are still holding up is largely due to the high initial cost of land acquisition, as developers are reluctant to cut prices unless absolutely necessary. However, the fact that market demand is weakening cannot be concealed.
A minor price reduction will slow down the pace of inventory clearance. The real estate crisis in Guangzhou is not nonexistent; it has simply been postponed due to enthusiastic investment. Yet, the combined efforts of private and government investments may not be sufficient to support housing prices in Guangzhou. Therefore, a future price decline remains a highly probable event.
In reality, Guangzhou’s current real estate market is more about listings than actual transactions. People are buying properties with the intention of flipping them, creating an illusion of stability. However, these properties are not selling.
If Guangzhou’s housing prices remain stubbornly high, the accumulating downward pressure will continue to grow. Developers' financial constraints will also increase, possibly leading to a scenario where they cannot sell even after price cuts. This could trigger market panic, eventually leading to price corrections.
Therefore, the gap between listing prices and actual transaction prices is expected to widen further, indicating that the decline in Guangzhou’s housing prices has only just begun.
Don’t fixate on the down payment.
Real commitment only comes when 0% interest loans become available someday.
There will be more and more experts advocating for birth rates and population, otherwise, where will so many potential successors come from?
0% down payment, still carrying debt.
I’m not interested in real estate jokes.
The market trend indicates the actual value of the house.
If you don’t buy, I won’t buy; the house can still drop by two hundred.
If you don’t loan, I won’t loan; the mortgage can still be two bucks cheaper.
Precise Prediction of RMB Assets' Downturn in Late 2022
In the realm of RMB assets, starting from 2023, a phenomenon referred to as the “Four Killers” (stocks, bonds, foreign exchange, and real estate) emerged. Numerous funds and trusts went bankrupt, a significant number of high-net-worth individuals and the middle class experienced a downturn, and the employment situation became more severe. For more details, please refer to my previous responses on Zhihu, including “Why Does the Zhongzhi Group’s Major Financial Event Seem Calm?” and “Why Are Netizens Celebrating the Zhongzhi Group’s Suspected Bankruptcy?” I want to emphasize that I have always maintained my stance of not shorting RMB assets; it’s a principle I adhere to.
In 2024, the domestic real estate market will continue the trend seen in 2023:
Non-core areas of first-tier cities and housing prices in second, third, fourth, and fifth-tier cities will continue their bottom-finding process.
Amid a deteriorating balance sheet, there will be increased competition for core assets, with distinct structural features. For example, in the past two years, new and relatively new properties in Beijing’s Dongcheng, Xicheng, and Haidian districts have continued to appreciate. On average, my properties have gained less than 5% in value since the beginning of 2023.
Reviewing 2023, moving from A9 to A10; looking ahead to 2024 and the journey towards A11. With the SEC approving a Bitcoin spot ETF and the market trends related to Ethereum, my assets have reached new heights. Has China entered a “balance sheet recession”? Based on my “black hole asset” theory, I predicted the significant rise in US stocks. Let’s revisit my classic 2023 annual predictions. It appears that the bear market in US stocks is coming to an end, and while others panic, I remain greedy. Revisiting the topic of US stocks and cryptocurrencies at the bear market’s end from a new perspective.
90% of human thinking ability, principles of action, and problem-solving methods are all Yuan Shao-style behavior;
Hesitating, constantly looking back and forth, unable to distinguish between primary and secondary contradictions, unable to let go of interests, missing the best opportunity to solve crises.