Can "Home Ownership" Save The Third And Fourth Tier Property Market After The Tide Of Shed Reform?

With the closing of the new year, the annual tide of population migration has officially opened. Due to the reasons of epidemic prevention and control, many places advocate the Spring Festival "on the spot" in 2021.

"Home purchase" refers to the behavior of returning home to buy a house from the city where he works. In recent years, due to the high cost of living in big cities, increasing pressure, and the introduction of talent introduction policies in small and medium-sized cities, it is quite common for young people to return home and buy a home. Many young people choose to stay in their hometown to work and live after returning home.

According to the survey of "drifters" in first tier cities by Shell Research Institute, 44.8% of respondents said they would like to return to their hometown or provincial capital city to buy a house.

In the past few years, the upsurge of shed reform is considered to be the main reason for the prosperity of the third and fourth tier property market, but behind this, the role of home ownership can not be ignored. Many cities will launch corresponding discount promotion measures during the Spring Festival and National Day holiday, and the effect is good. A real estate practitioner in a city in Hubei Province told the 21st century economic reporter that before the epidemic, the sales brought by home purchase accounted for 30% to 40% of the city's annual sales volume.

In recent two years, the tide of shed reform has made the third and fourth line property market appear obvious cooling. Can home ownership fill this gap and continue to stimulate the market?

"Returning home" does not mean returning to the third and fourth line

The peak of home ownership mainly occurs in the Spring Festival and National Day holidays, in which the Spring Festival holiday is the most important. Due to epidemic prevention and control and other reasons, the number of people returning home during the Spring Festival holiday has decreased. According to the data of the Ministry of transport, it is estimated that about 1.7 billion passengers will be sent during the National Spring Festival transportation in 2021, with an average daily passenger number of 40 million, which is 15% higher than that in 2020, but 43% lower than that in 2019.

This situation is bound to affect the enthusiasm for home ownership. According to the statistics of different institutions, the willingness to return home and buy a home in 2021 is on the decline.

Shell Research Institute pointed out that 44.8% of the respondents said they would like to go back to their hometown or provincial capital city to buy a house, down from 47.6% in the same period last year.

58. The survey data of anjuke Real Estate Research Institute also shows that 37.8% of the people plan to return to their hometown in 2021, and their willingness is significantly reduced. In contrast, 61.2% of people want to buy houses in and around the working city. Specifically, 47.6% of people choose to buy a house in the city where they work, and 13.6% choose to buy a house in the city around the working city.

According to the agency, although the first tier cities have unfavorable factors such as high housing prices and high entry barriers, the attraction of career development space is increasing. Especially in the case that the epidemic has caused heavy damage to many industries, the development space advantages of first tier cities are fully displayed.

Even if you choose to return home, third and fourth tier cities are no longer the first choice. Taking into account the elderly medical treatment, children's education and other factors, more and more people choose to return to the provincial capital city of the province, rather than the small town where their hometown is located.

According to the statistics of Shell Research Institute, the top 10 cities with hot intention of home ownership are all new first tier cities, of which Chengdu, Hangzhou, Wuhan, Changsha and Zhengzhou rank among the top five. Among the second tier cities, Shijiazhuang, Jinan, Nanchang, Ningbo, Dalian and so on are more popular to return home.

Shell Research Institute pointed out that good economic foundation, loose settlement policy and relatively relaxed life rhythm are the main reasons for attracting talents.

In the past two years, many cities have implemented preferential policies in terms of settlement and house purchase, attracting a large number of talents. According to Yan Yuejin, director of the think tank center of Shanghai E-House Research Institute, these talent introduction policies have changed the connotation of "returning home" in a certain sense. In the new context, "returning home" refers to returning to big cities in the province, rather than the third and fourth tier cities.

What is the prospect of the third and fourth tier property market?

For the third and fourth tier property market, this situation is obviously not good.

From 2016 to 2018, the large-scale shantytowns transformation has formed a significant support for the national property market, especially greatly stimulating the housing demand of the third and fourth tier cities. Starting from 2019, the scale of shed reform is rapidly declining, and the third and fourth tier property market is gradually cooling down. By 2020, the first and second tier cities have become hot spots in the market again.

Among the 70 large and medium-sized cities included in the statistics of the National Bureau of statistics, starting from the fourth quarter of 2020, the house prices of the first tier cities rose again, and the increase of the third tier cities has been significantly narrowed compared with the previous two years.

The central economic work conference held at the end of last year stressed that "solving the outstanding housing problems in big cities" will be one of the key tasks in 2021, which is regarded as evidence that the third and fourth tier property market has cooled down.

According to the statistics of Ping An Securities, the average monthly sales price of cities other than 40 large and medium-sized cities (also known as "non-40 large and medium-sized cities") was 7129 yuan / m2 in December last year, down 11.6% month on month. Nevertheless, the sales growth rate of the central and western regions dominated by the third and fourth tier is still weak.

The agency said that although the boom in shed reform has released a lot of demand from third and fourth tier cities, its overall inventory is still adequate. At the same time, since the second half of last year, the newly started area in central and Northeast China has increased significantly. It is expected that the inventory in the third and fourth tier cities will accelerate the accumulation in the future.

This is also in sharp contrast to the weakening demand caused by the cooling down of "home ownership". Ping An Securities pointed out that under the contradiction between supply and demand, the follow-up needs to pay close attention to the trend of the third and fourth line property market.

In fact, some third and fourth tier markets have strong dependence on home ownership. A real estate practitioner from a prefecture level city in Hubei Province told the 21st century economic reporter that the performance brought by returning home during the Spring Festival can account for 30% to 40% of the annual sales volume of regional companies. Last year, due to the impact of the epidemic, during the Spring Festival home buyers almost "nothing.". Even after the end of the epidemic, the rebound in the market is very limited.

"Many people's incomes have been affected and their purchasing power is insufficient. And because the epidemic prevention and control lasted almost a whole year, the number of people returning home is obviously small, let alone buying a house. " The person said.

Yan Yuejin believes that in the context of the cooling of the shed reform and the impact of home ownership, the downturn of the third and fourth tier property market will continue. The only positive factor is that the residential restrictions have been basically lifted in cities with a permanent population of less than 3 million. However, it still needs to be further observed to see how stimulating the third and fourth tier property market is.

In the short term, some of the third and fourth tier cities with large population export scale may find it difficult to avoid the cooling of the property market. The report of Shanghai E-House research institute points out that the local new year's policy issued by many places will indeed restrain the centralized release of demand for house purchase in the third and fourth tier cities to a certain extent, but there are still significant differences in different regions

First, the property market in Beijing, Tianjin, Hebei and eastern provinces was relatively affected. It is not ruled out that the housing sales offices will be closed and the supply and demand will be suspended due to repeated outbreaks in the later period.

Second, some labor export-oriented cities in Anhui, Henan, Hunan, Guangxi and Jiangxi, such as Fuyang, Xinyang, Zhoukou, Hengyang, Yulin, Ganzhou, etc., are not optimistic about the Spring Festival property market. On the one hand, migrant workers in these cities generally choose the core first and second tier cities along the southeast coast, which is greatly affected by the new regulations on returning home; on the other hand, from the actual investigation, brand real estate enterprises are competing to sell at a lower price, and the price of weak third and fourth tier cities has approached the cost line, and the inventory pressure is great. If the homecoming home property is absent again, the downward pressure in 2021 will also intensify.

Third, the third and fourth tier cities in Jiangsu, Guangdong, Sichuan and Hubei are relatively less affected, mainly due to the concentration of population in the provincial capital cities, and their dependence on home ownership is relatively low. Even if they are forced to "stay" in the provincial capitals, these cities may welcome the opportunity of returning home for home ownership due to loose control.

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