With the arrival of 2023, China's real estate market has ushered in a spring breeze of policy changes. The "four restrictions" policy in first- and second-tier cities has begun to be gradually relaxed, injecting new vitality and opportunities into the market. Today, let's take a look at the reasons, implications, and future trends behind this policy change.
The driving force behind policy relaxation
Pressures on economic growthAmid the twists and turns of the global economy, China is also feeling the pressure of economic growth. Real estate is an important engine of the economy, and policy relaxation aims to stimulate market demand and boost economic growth.
Example: Shenzhen, as a representative of first-tier cities, is particularly under economic pressure. Policy relaxation can help unleash market demand and boost economic growth.
Urbanization and population mobilityWith the acceleration of urbanization and the concentration of population in core cities, the contradiction between supply and demand in the real estate market has gradually become prominent. The policy adjustment is to better meet the market demand.
Example: In Shanghai, for example, the demand for the real estate market continues to grow as the population inflows and urbanization accelerates. Policy relaxation will help alleviate the contradiction between supply and demand.
The impact of policy relaxation
Increased market activityWith the gradual relaxation of policies such as purchase restrictions and sales restrictions, more buyers and investors have been able to enter the market, thereby increasing the activity of the market. According to statistics, as of December 18, 2023, at least 273 provinces and cities across the country have issued 622 easing policies, and the real estate market in first-tier cities such as Beijing, Shanghai, Shenzhen and other places has shown a clear active trend.
Variation: With the relaxation of the price limit policy, housing prices in some popular areas have begun**. Taking Hangzhou as an example, after the cancellation of price limits, there has been an obvious trend in housing prices in some popular areas. This puts more financial pressure on home buyers and investors.
Financial riskUnder the policy of "recognising the house but not the loan", some home buyers may adopt improper means to circumvent the purchase restriction policy and increase the bank's loan risk. In addition, house prices** may also lead to an increased burden on some home buyers, increasing the risk of default.
Social equity issues: In some cities, families with many children can receive a higher CPF loan amount or a housing subsidy. This can lead to easier access to preferential treatment for wealthy families and exacerbate social injustices. For example, after Shanghai increased the amount of provident fund loans for families with many children, it may be difficult for some ordinary families to enjoy the dividends of the policy.
The deeper meaning of policy relaxation
**The wisdom of regulation: The relaxation of policies shows the flexibility of ** in the regulation of the real estate market. Adjust policies in a timely manner according to market conditions to ensure the stability and healthy development of the market. This shows that we are committed to finding a balance between economic growth, market stability and people's livelihood and well-being.
Shifts in long-term trendsWith the gradual relaxation of the "four restrictions" policy in core cities, the focus of the development of the real estate market in the future may shift to first- and second-tier cities. This will influence the strategic decisions of developers and investors. This shift will prompt developers to pay more attention to investment opportunities in first-tier cities, while investors will also look for more profitable investment projects in first-tier cities.
Summary and Recommendations
The relaxation of policies has brought new opportunities and challenges to the real estate market. While enjoying policy dividends, we should also be vigilant against potential risks. Businesses and individuals need to be prepared to respond rationally to changes in the market. In the formulation of future policies, more attention should be paid to social equity and the prevention of financial risks to ensure the scientificity and effectiveness of policies. Let's look forward to a more prosperous and stable real estate market!
Real estate