What is the turning point of the developer's price reduction and promotion in the Shanghai property market?

According to the latest data released by the National Bureau of Statistics, the prices of new commercial residential buildings in Shanghai fell by May in 0.3%, the biggest drop among the four first-tier cities in Beijing, Shanghai and Guangzhou, and May 2 in 0.2%, second only to Beijing. This is the first time that the prices of new homes in Shanghai have risen for 24 months.

According to industry insiders, the latest data released by the National Bureau of Statistics has a certain lag. The data in June and July is expected to be "more ugly". Developers are expected to cut prices sharply in the third quarter, therefore, the actual price reduction is more serious than the data. The author thinks that high housing prices, poor credit, and just need to wait and see are all important reasons for the "lagging prices" of the Shanghai property market.

As of January June 22, the total turnover of commercial residential buildings in Shanghai this month was only 0.4327 million square meters. According to the current average daily turnover, the turnover of commercial residential buildings in Shanghai will reach June square meters in 0.6 million, this is still a low level. In the face of such circumstances, some developers in Shanghai have begun to announce price reductions, and I believe that if the Shanghai property market continues to be in this cold state in the second half of the year, the price reduction trend or "from point to point" will be rolled out across the board. So what are the developers' intention to cut prices in Shanghai, which is an inch of gold?

First, the funds are withdrawn from the inventory to facilitate further competition. Compared with high-inventory commercial housing in second-and third-tier cities, the supply of commercial housing in Shanghai has also hit a recent new high. Recently, the supply of the Shanghai property market has soared ". According to data monitored by the jinfeng yiju & Youwei Joint Research Center, last week (June 16 ~ In June 22, the new supply of commercial residential buildings in Shanghai continued to surge to a rare level of 0.4232 million square meters on the basis of a sharp increase in the previous week, which is 88.68% higher than the average new supply in the year, it has set a new high in supply for the last 32 weeks since last middle November.

In addition, the transaction continued to be deadlocked, but the inventory of the Shanghai property market is still rising. As of yesterday, the inventory of new commercial residential buildings in Shanghai has reached 11.185 million square meters, hitting a new high this year. In this context, developers can reduce the price appropriately so that funds can be withdrawn from stock.

Furthermore, the performance of listed real estate companies is under great pressure, and price reduction and promotion are the only choice. According to data provided by the Central Plains real estate market research department, more than 30 listed real estate companies have released 1 ~ Sales data for May. Among them, the sales performance of 17 housing enterprises decreased, accounting for 56.67%. According to the annual target, in addition to the completion of Evergrande, Vanke and other enterprises, other real estate enterprises have poor standards, and the average completion rate is only 29%. 19 enterprises with less than 30% completed tasks, accounting for 63.3%.

The author believes that if a listed real estate company fails to fulfill its annual sales target, it will be unable to fulfill its shareholder commitment, and the company's share price will face a lot of downward pressure. In addition, because the shares of many listed companies are pledged by major shareholders, they often bring about a series of negative chain reactions. Therefore, for listed real estate enterprises, only price reduction and promotion can make up for the performance gap in the first half of the year. The Shanghai property market, as the main direction of listed real estate companies in the past few years, has a huge bubble. Therefore, downgrading Shanghai real estate is the primary choice for listed real estate prices.

Finally, the continued decline in transaction volume also led to an increase in the expectations of buyers who just needed to cut prices. Nearly of buyers think that they should wait for a further decline in house prices. That is to say, this "buy up or not buy fall" mentality has largely affected the Shanghai property market to fall into the current stalemate. As developers, if they want to promote sales, they must cater to the homebuyers' mentality and make a portion of the profits and lower the high property prices.

Of course, the developer's price reduction and promotion did not have little effect. On September 10, June 7, a property opened in Jiading new city, with a turnover of 80% on the same day, and the developer's price reduction was up to 18%. However, I believe that the price reduction and popularity of some projects does not mean that the turnover of the Shanghai property market has started to rise. Data shows that as of June 12 this year, the volume of new demand buildings with a unit price of 25 thousand yuan/square meter or less was 2.225 million square meters, accounting for 62.8% of the market volume, Down 6% from the same period last year, compared with 2012, it declined by 11%. So will the developer's price reduction and promotion be fulfilled? The author believes that the three factors determine the transaction volume in the third quarter of the Shanghai property market.

First, is the developer's discount strong enough? From the current perspective, many developers have reduced their prices only between 10%-20%, but they have not fundamentally achieved discounts. In the face of millions of high house prices, the demand is still very hard. Therefore, unless developers further increase their discounts to attract Just-in-demand customers, the benefits of the like will not attract a large number of people watching the house.

Second, is the bank's personal loan interest rate favorable? Does lending speed accelerate for individual loans? At present, although the Central Bank requires major commercial banks to relax their personal loan restrictions on purchasing new houses, banks do not pay much attention to personal loans. On the one hand, this is a long period of time with a high risk. On the other hand, if the interest rate of individual loans is limited, it is better for banks to obtain greater benefits when lending to small and medium enterprises. Therefore, in the future, both personal loans and development loans will be a tight environment!

Third, compared with the relaxation of the purchase restriction order in the second and third-tier cities, the relevant departments have repeatedly stated that the cancellation of the purchase restriction in Shanghai is unlikely. Therefore, the Shanghai property market is more suitable for fine-tuning policies. In this case, the strong purchasing power of other provinces and cities is limited by the limit on purchase and loan limit, and the local demand in Shanghai is not available for the moment, as a developer in the third quarter of the third quarter, if you do not increase sales promotion or even slightly profitable sales, I am afraid there is a possibility of Performance recovery.

At present, the property market in China has fallen, and Shanghai house prices have also experienced inflection points. Some developers want to withdraw funds and improve their performance through price-based changes, but in the face of tens of thousands of high house prices, the price reduction is not flattering. With the current price reduction, it is difficult to restore the previous sales volume. Therefore, in the second half of the year, developers must increase their sales targets. By then, prices in Shanghai will inevitably be adjusted significantly, and the turning point of the first-tier cities will show.

 

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