Recently Yahoo News on-line reported the following:
China property: 'underwhelming' stimulus to fall short of
refloating market amid sunken buyer confidence, analysts say (1/2)
South China Morning Post
Sat, May 25, 2024 at 2:30 a.m. PDT·9 min read
Scott Xiong of Wuhan, the capital city of China's central Hubei province, is racked with disappointment after a potential buyer pulled the plug on a deal to buy his home last week. Now the 30-year-old PhD student is considering cutting another 50,000 yuan (US$6,900) from his asking price, which is already close to his original floor price.
Meanwhile, 840km away in Shanghai, Li Huiting is feeling buyer's remorse after she bought a second-hand home with her husband in the city's Pudong New Area in April. Prices then had already dropped by around 1 million yuan compared with a year earlier, but now the 26-year-old teacher thinks "prices might go lower if I waited for a while".
Both stories suggest that a stimulus plan unveiled a week ago - including more than US$41 billion for local governments to buy unsold homes - may not be sufficient to refloat China's massive property market, which ran aground more than three years ago. Certainly little has changed for potential buyers, who at this point have been conditioned to expect falling prices and to eye developers' promises about delivery dates with a jaundiced eye.
"This is a buyer-led market, where I must offer more benefits to lure buyers," Xiong lamented. In fact, he worries that the new policies reinforce the idea that the market is in a downturn, leading buyers to delay their decisions in case prices plummet further or even more supportive measures rain down.
The property market once accounted for about a quarter of China's economy but has been high and dry since August 2020 when China's "three red lines" policy shut the industry's weakest borrowers out of the capital markets.
To bail it out, authorities on this month reduced down-payment ratios, cut mortgage interest rates and introduced the 300 billion yuan (US$41.4 billion) relending facility, which allows local state-owned enterprises to buy unsold homes they can then offer as affordable housing. They will also be able to buy back undeveloped land from developers.
The policies are widely viewed as evidence that Beijing is finally on the right track to fix the country's property sector. Anecdotally, the moves have had an effect, as homebuyers in some of the biggest cities rushed to sales offices to scout for deals. For example, viewing requests in Shenzhen on the weekend after the announcement were three times what they were a week earlier, according to property agent Centaline.
However, official data shows China had 391 million square metres of unsold homes as of end-April, the most since 2016. Unfinished or delayed pre-sold homes numbered 20 million at the end of 2022, which would cost an estimated 3.2 trillion yuan to complete, according to an analysis by Japanese investment bank Nomura.
"Will the new funding be enough to return the property market to its glory days? Almost certainly not," Harry Murphy Cruise, an economist at Moody's Analytics, said in a note on Monday. The relending funding is "a drop in the ocean" given the scale of unsold stock, he added.
Specifically, the funding could purchase up to 15 per cent of the inventory in tier-2 cities, but only at a deep discount, which is "rather underwhelming" and "will be unlikely to make a notable difference to nationwide housing inventory", Bank of America analysts said on Monday.
More than 1 trillion yuan of capital injection would be needed to reduce the saleable inventory and stabilize prices, Goldman Sachs analysts said in a May 13 report looking at 80 cities. The process could take at least nine months based on past down-cycle run rates, they said.
Simply on a practical basis, some unfinished projects will need a lot of attention, according to Liu Huanhuan, a general manager with Huapai Auction in Shanghai, which specializes in distressed assets. One 17-storey residential building she knows of in eastern Jiangsu province, for example, now sits in the middle of a pond that formed as water collected on the deserted construction site.
Meanwhile, homebuyer confidence may take as long to rebuild as absorbing the excess inventory - or longer.
As lack of trust in delivery promises deters buyers from newly built homes, a gap has widened between the primary and secondary markets. New home sales fell by 12 per cent last year, whereas sales of secondary homes increased by 17 per cent, according to estimates by S&P Global.
"This outperformance shows that homebuyers still have an appetite to buy residences," S&P analysts led by Esther Liu wrote in a note. "They just don't want to pay upfront for a new home from a developer that may lack the resources to finish and deliver the unit. Buying housing on the secondary market removes that uncertainty."
Buying up inventory, though widely discussed, is secondary to the more important work of ensuring delivery of pre-sold homes, Nomura's Lu said. "Rebuilding homebuyers' confidence in the presale system is the precondition for a revival of the housing market," he said.
(to be continued)
Translation
住在中國中部湖北省省會武漢市的 Scott Xiong 在一名潛在買家上週取消了購買其房屋的交易後感到非常失望。現在，這位 30 歲的博士生正在考慮將要價再削減 5 萬元（6,900 美元），這已經接近他原本的購入價了。
同時，在840公里外的上海，Li Huiting 今年4月與丈夫在上海浦東新區買了一間二手房，現在她正感到作為買家而悔恨。當時價格已經比一年前下降了100萬元左右，但現在這位26歲的老師認為「如果再等一段時間，價格可能會更低」。
這兩個故事都表明，一周前公佈的刺激計劃 - 包括為地方政府提供超過410億美元購買未售出的房屋 - 可能不足以重振三年多前擱淺的中國龐大房地產市場。對於潛在買家來說，顯然情況幾乎沒有改變，他們此時已經習慣於預期價格下跌，並以偏見的眼光看待開發商對交付日期的承諾。
Xiong感嘆道: 「這是一個買家主導的市場，我必須提供更多優惠來吸引買家」。事實上，他擔心新政策強化了市場處於低迷狀態的想法，導致買家推遲做出決定，以防價格進一步暴跌，甚至可能會見到更多支持性措施出台。
房地產市場一度約佔中國經濟的四分之一，但自2020年8月中國的「三條紅線」政策將房地產行業實力最弱的借款人拒之門外以來，房地產市場一直處於高位低迷狀態。
為了紓困，當局本月降低了首付比例，降低了抵押貸款利率，並推出了3,000 億元人民幣（414 億美元）的再貸款安排，允許地方國有企業購買未售出的房屋，然後以可負擔的價格出售。他們還可以從開發商手中回購未開發的土地。
這些政策被廣泛視為北京最終走上修復中國房地產產業的正確軌道的證據。有趣的是，這些舉措產生了效果，一些大城市的購屋者紛紛湧向銷售辦公室尋找交易。例如，根據房地產仲介中原地產稱，公告發布後週末深圳的看房需求是一週前的三倍。
然而，官方數據顯示，截至4 月底，中國未售出房屋面積為3.91 億平方米，為2016
年以來最多。日本投資銀行野村證券的分析顯示，截至 2022 年底，未完工或延遲預售的房屋數量為 2,000 萬套，預計完工成本將達
3.2 兆元。
Moody's Analytics 經濟學家 Harry Murphy Cruise 週一在一份報告中表示：「新資金足以讓房地產市場重回輝煌歲月嗎？幾乎肯定不會。 」他補充說，考慮到未售出庫存的規模，再貸款資金「只是滄海一粟」。
銀行美國分析師週一表示, 具體來說，這筆資金最多可以購買二線城市15%的庫存，且要有大幅折扣，這是 “相當平淡” ，而且“不太可能對全國住房庫存產生顯著影響”。
高盛分析師在 5 月 13 日發布的一份針對 80 個城市的報告中表示，需要超過 1 兆元的資金注入來減少可售庫存並穩定價格。他們表示，根據過去的下行週期運行率，這個過程可能需要至少九個月的時間。
專門從事不良資產的上海 Huapai Auction 總經理 Liu Huanhuan表示，從實際情況來看，一些未完成的項目需要高度關注。例如，她所知道的江蘇省東部一棟 17 層住宅大樓現在坐落在一個池塘中央，這個池塘是由廢棄的建築工地上所收集的水形成的。
她說: 「振興這些陷入困境的房產將是一個漫長的過程」。
野村證券首席中國經濟學家 Lu Ting 表示：「當前庫存帶來的風險不容忽視」。他補充說，由於房地產開發商的新項目開工量處於全球金融危機以來的最低水平，因此即將到來的庫存是有限。
同時，重建購屋者信心的時間可能與吸收過剩庫存的時間一樣長，甚至更長。
由於對交付承諾缺乏信任，買家不敢購買新建房屋，一手市場和級手市場之間的差距已經擴大。根據標準普爾全球公司的估計，去年新房銷售量下降了 12%，而二手房銷售量則增加了 17%。
以 Esther Liu 為首的標準普爾分析師在一份報告中寫道： “這種優異的表現顯出購房者仍然有購買住宅的興趣。” “他們只是不想向可能缺乏資源來完成和交付該單位的開發商預付新房費用。在二手市場上購買住房可以消除這種不確定性。”
野村證券姓 Lu 的人仕表示，儘管人們廣泛討論，但購買庫存的問題, 相對於去確保預售房屋能交付這一更重要的工作來說是次要的。他表示： “重建購房者對預售制度的信心, 是房地產市場復甦的前提。”
（待續）
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