Top Ten Events of China Real Estate in 2016

Housing prices in first-tier cities skyrocketed at the beginning of the year.

The property market in early 2016 is very similar to the stock market in early 2015. Everyone talks about stocks and everyone talks about houses. Housing prices in first-tier cities have gone up like a runaway, and Shanghai has even seen a price jump of 700,000 a day. At the same time, the scene of buying a house is no less than the double eleven.

In Shanghai, Lujin Shanghai School attracted nearly 100 buyers to queue up overnight in the middle of the night before the opening, and even friends in the team came wrapped in quilts, which surprised many people in the industry.

In Hangzhou, the second phase of Yangliu County in Greentown opened, and even 1000 people grabbed the source of 388 suites.

In Guangzhou, Vanke Mountain View City, which was just the opening time before, couldn’t wait to push it after the holiday, and it was robbed half an hour after the opening.

In addition to the bursting of real estate, the real estate trading center is also overcrowded, and Shanghai Baoshan Trading Center has to implement current-limiting measures.

On the one hand, the real estate in first-tier cities is an ideal haven, and safe-haven investment has become the most direct factor to promote this round of skyrocketing. On the other hand, at the beginning of this year, the central bank lowered the down payment ratio, and social funds also participated. The loose credit policy provided financial solutions for buyers, and financial services similar to "down payment loans" also boosted the rise of housing prices to some extent.

De-leverage the property market and strictly control the "down payment loan"

The so-called down payment loan refers to the fact that when the down payment funds of buyers are insufficient, real estate agents or financial institutions can provide them with subsidy funds for borrowing, which can be used by buyers to enlarge the leverage of buying houses. In some areas where house prices are rising rapidly, the existence of down payment loan has reduced the actual down payment of some buyers to 10%, which is equivalent to 10 times the leverage, and the leverage ratio is much higher than the "off-site fund-raising" at the peak of the stock market last year.

With the skyrocketing housing prices in first-tier cities, "down payment loans" began to surface, attracting the attention of the regulatory authorities. Shenzhen was the first to take the shot. In March this year, Shenzhen Financial Office issued a letter to prevent financial risks in the real estate industry, requiring Internet finance associations and small loan associations to investigate the situation of leveraged lending by enterprises under their jurisdiction and sort out the product model and the amount involved. At the same time, Guangzhou also began to investigate P2P and small loan companies to issue down payment loans.

A regulatory storm against leveraged funds represented by "down payment loans" is coming. If house prices continue to rise, using leverage may make a lot of money; Once house prices fall, there may be "trampling". If the high leverage of housing market is allowed to continue, it will be a financial disaster.

Real estate in first-tier cities is overheated, and the government urgently regulates it.

On March 25th, the Shanghai Municipal Government promulgated "Several Opinions on Promoting the Stable and Healthy Development of the Real Estate Market" to strictly control the property market, among which the most stringent provisions include: "Non-registered households in this city must pay social security for five years or more; For households with a set of housing, the down payment ratio for purchasing improved ordinary self-occupied housing has increased to 50%, and the down payment ratio for purchasing non-ordinary housing has increased to 70%. "

This regulation policy is called the strictest regulation in Shanghai. Coincidentally, Shenzhen has also introduced a regulation policy: non-deep households buy houses in Shenzhen, and the social security payment period is increased from the previous year to three years; The first suite paid off the mortgage, and when buying the second suite, the down payment was increased from 30% to 40%.

Under the strict control policy, the transaction volume of housing prices in Shanghai and Shenzhen dropped sharply, followed by the sale of some properties at reduced prices. Different from Shanghai and Shenzhen, due to the crowding-out effect of regulation, the property market in second-tier cities, such as Suzhou and Nanjing, began to boom, and the transaction volume and transaction price rose.

The expiration of some real estate land use years in Wenzhou has aroused the concern of the whole people.

In April this year, some citizens in Wenzhou were unable to conduct normal transactions when buying and selling second-hand houses. The reason was that the land had expired, and they had to pay hundreds of thousands of yuan of land transfer fees to re-apply for land certificates. They spent millions of yuan to buy houses, and they had to pay a lot of money after the expiration. After our house expires, we have to spend a lot of money to renew it, which has aroused heated discussion and concern from all walks of life.

The property right of the house we live in is divided into two parts, one is the house ownership, which is permanent, and the other is the land ownership. The right to use residential land is generally 70 years, which is also a controversial place.

What should I do if the property right expires after 70 years? According to the relevant provisions in the Property Law, the house is "automatically renewed" when it expires, but it has never been said that this is automatically free.

On the morning of December 23rd, Wang Guanghua, Vice Minister of the Ministry of Land and Resources, said that there was no need to apply for renewal, charge no fees, and handle the transaction and registration procedures normally, which was a clear solution. However, Wang Guanghua also mentioned that this is a transitional approach, and the formal approach has to wait for the introduction of relevant legal arrangements.

There are frequent land kings in first-and second-tier cities, and the price of "flour" is higher than that of "bread"

In May this year, the land market in Shanghai ushered in the first land transfer after the regulation of "Shanghai Nine Articles". The three plots of land in Fengxian and Songjiang all had a premium of more than 100%. The floor price of the two plots in Songjiang was close to 40,000/square meter, and the guaranteed price was 60,000/square meter, which was higher than the regional house price. A week later, the Zhou Pu plot was auctioned, with a floor price of 54,500/m2 and a guaranteed price of 79,000/m2. Similarly, in Nanjing, Hangzhou, Xiamen and Hefei, there have been cases of high premium land acquisition.

Developers seem to be crazy about taking land, the main reason is that they are worried about the future land supply. Take Shanghai as an example, Shanghai has locked up 3,226 square kilometers of construction land, and by 2013, 3,070 square kilometers have been used, leaving less than 156 square kilometers (including business and industry) in the future. Therefore, the scarcity of land in Shanghai has reached an unimaginable level. Coupled with the downturn of the real economy, the real estate market has become a safe haven for wealth.

Shanghai exploded rumors of the new mortgage policy, and divorced people crowded into the Civil Affairs Bureau.

At the end of August, a crazy divorce tide was staged in Shanghai. Divorced people crowded the civil affairs bureaus, and some civil affairs bureaus had no choice but to start limiting the number. Shanghai people’s desperate divorce stems from a rumor that "after September, buyers who have been divorced for less than one year will be treated according to their family situation before divorce." As a result, families who were afraid that they could not buy a house after the New Deal began to queue up for divorce. Although, it was later proved that this was a rumor fabricated by a real estate salesman. However, divorce to buy a house has always existed. Marriage is to protect the family, but now it has become a tool for profit-seeking. Is this the irony of the marriage system or a silent accusation against the real estate system?

Real estate in first-and second-tier cities is out of control, and many cities have introduced purchase restriction policies.

In September this year, the property market went crazy again. Nanjing sold 1,500 sets of houses, and Hefei property buyers rushed for houses in the rain. The price of a building more than 20 kilometers away from the main city of Hangzhou jumped directly from 6,000 yuan to 9,500-11,500 yuan. In Shenzhen, a 6-square-meter pigeon cage with a price of 150,000 yuan per square meter broke out, and the people of the whole country were like witchcraft.

With the booming property market, the purchase restriction policy was immediately introduced. Around the National Day Golden Week, the purchase restriction orders of nearly 20 cities were intensively introduced, and the real estate market in many places was sorrowful. The turnover of new houses in hot cities such as Beijing, Hangzhou and Nanjing declined in a cliff-like manner. At the same time, due to the influence of the New Deal and the adjustment of the down payment ratio, many property buyers have to cancel their contracts because they can’t afford to buy a house.

On the other hand, due to the property market restriction, some funds began to switch to A shares or overseas insurance, which objectively created the structural market of A shares after the National Day and the enthusiasm of mainland investors for Hong Kong insurance.

China CDSWill the real estate bubble be good when it strikes?

On September 23rd, China Association of Inter-bank Market Dealers "Business Rules for Pilot Credit Risk Mitigation Tools in Inter-bank Market" (hereinafter referred to as business rules) and related supporting documents, based on the original two products, launched two new products, including credit default swaps (CDS).

In the movie "Big Short", the protagonist from Wall Street saw the bubble of real estate subprime loans and made huge profits by shorting CDS. Therefore, CDS is also considered to be an important driver of the 2008 financial crisis.

Whether the China version of CDS can help squeeze out the real estate bubble remains to be seen.

Li Ka-shing sells mainland property and withdraws from China.

In October this year, Changjiang Industrial Real Estate Co., Ltd., a subsidiary of Li Ka-shing, announced that it would sell the "Century Hui" complex in Lujiazui, Shanghai for 20 billion yuan. This transaction will bring Cheung Kong Real Estate 5.43 billion yuan, which is also the largest property sold in mainland China by Li Ka-shing so far.

At the same time, Li Ka-shing focused its investment on Europe — — Britain, in particular, has invested in power, natural gas, transportation, retail and other fields, and focused on infrastructure. Britain has become Li Ka-shing’s biggest profit source.

The main reason for Li Ka-shing’s selling of mainland real estate is that there are too many bubbles in mainland real estate, and the risks outweigh the opportunities. Early action can make the company in an invincible position.

The Central Economic Work Conference decided that "the house is for living, not for speculation"

In December, the Central Economic Work Conference was held in Beijing, which mentioned that "houses are used for living, not for speculation", which not only curbed the real estate bubble, but also prevented ups and downs; Cities with high pressure of rising housing prices should reasonably increase land supply, and megacities should speed up the relief of some urban functions and promote the development of surrounding small and medium-sized cities; It is necessary to speed up the legislation of the housing leasing market and accelerate the development of institutionalized and large-scale leasing enterprises.

According to the content of real estate in the meeting, it can be inferred that the era of getting rich by real estate speculation has passed and real estate will return to the residential property; The functions of first-tier cities such as Shanghai and Shenzhen will be evacuated, and there will be more opportunities in surrounding small cities; The focus of the real estate industry will gradually shift from the buying and selling market to the leasing market, which may be the next opportunity for the real estate industry.