This year, China took the lead in setting off a housing boom in the new first-tier city in the west—Chengdu. In March, Chengdu’s second-hand housing transaction volume not only led the country, but also set a record for the highest monthly transaction volume in Chengdu in the past seven years.
According to the public online signing data of the Chengdu Bureau of Housing and Urban-Rural Development, the recorded transaction volume of second-hand housing in Chengdu exceeded 28,000 units in March, a monthly increase of 48% and an annual increase of 103%. It sold more than 4,000 units more than Shanghai, and the monthly transaction volume exceeded last year The transaction volume of second-hand housing in Shenzhen throughout the year.
The number of second-hand housing listings is close to 200,000 units, and the supply and demand are booming
According to a report from China Business News, Zhang Lianwen, who has been working in Chengdu for five years, has not considered buying a house in the past few years, but he has recently started to look at houses. “Suddenly, everyone around me is talking regarding houses. Some friends are buying new real estate, and some are looking at houses in the school district.”
Zhang Lianwen said that when he came to Chengdu following graduating from university, he never felt that buying a house might make a lot of money. Since 2016, there has been a round of price increases in Chengdu, but following that it has been sideways for a long time. In his impression, until 2022, housing prices in Chengdu will be tepid. Some colleagues said that they did not make money following buying a house, and had to repay the mortgage every month.
What really made Zhang Lianwen want to buy a house was the sharp drop in mortgage interest rates. “I learned following the Spring Festival this year that the first-home loan interest rate in Chengdu has dropped to 4.1%, and the provident fund loan interest rate is even lower. Compared with the previous high interest rate, I can pay less in one month on the loan now (RMB, the same below) a housing loan of more than 1,000 yuan, this is a real benefit for us “workers”. “He said.
Zhang Lianwen has not made a move yet. He said that following the huge increase in the housing market in February and March, the prices of new and second-hand housing did show signs of rising, but it is not a common phenomenon, so he is not panicked. “It mainly depends on the sector and the quality of the house. I want to buy a house with a middle-to-high quality, so as to save the trouble of changing houses in a short period of time. However, this type of new house is not easy to grab now. Compared with the previous two years, second-hand houses do have a certain The increase, but it is still within my acceptable range. I don’t think there will be much room for growth in remote or poor-quality old houses, following all, there are so many listings in the market now.” He said.
According to the data of second-hand houses listed by the shell search system, in late October last year, the number of listings was regarding 178,000, and it exceeded 180,000 in November, and exceeded 188,000 in April 2023. Shell Brokers revealed that internal data shows that the number of listings is regarding 200,000.
“The current high transaction volume of second-hand housing is due to the increase in supply and demand. The number of second-hand housing listings is large, and there are many houses to choose from. Last year, many policies to loosen the housing market were proposed, and the housing prices on the market have also increased. “Zhang Lianwen said.
A large number of self-occupied customers flood into the second-hand housing market
From the perspective of urban fundamentals, Chengdu is an important metropolis in western China, with strong economic development and advantages in natural resources, and strong strength and economies of scale in manufacturing, modern service industry, cultural tourism and other industries. In recent years, Chengdu has actively promoted urban construction and quality upgrading, strengthened technological innovation and talent introduction, and has a strong “siphon effect” in the western region.
Chengdu’s gross domestic product (GDP) will exceed 2 trillion yuan in 2022, second only to Chongqing, a municipality directly under the central government, among the cities in the west, and its per capita GDP will reach 98,200 yuan, surpassing Chongqing. Not only people from Sichuan Province go to Chengdu, but many young people from western provinces such as Qinghai and Gansu also choose to make their homes in Chengdu. Currently, the permanent resident population in Chengdu exceeds 21.19 million, an increase of more than 6 million compared with ten years ago.
According to the statistics of CRIC, a research institution, the main customer group of second-hand housing in Chengdu is pure rigid demand customers who are first-time home buyers, with a rate as high as 60%. Among the first-time buyers who just need to buy a home, most people tend to buy two or three rooms with an area of less than 90 square meters, and the total price is controlled within 1.5 million yuan. At present, regarding 60% of the second-hand houses in Chengdu have a total price of less than 1.5 million yuan, and regarding 30% of them are between 1.5 million and 3 million yuan. The average area of the transaction is only 93.1 square meters.
Wu Qiang, a real estate agency agent in Chengdu, said that most of the second-hand housing customers he has contacted are self-occupied, and many of them are young couples who come to Chengdu to work and settle down. There are also local customers who buy for self-occupation. During the three years of the epidemic and the period of housing price decline, there is a large backlog, and it is currently in a state of demand release.
In addition, among the house sellers, there are also people who change houses, such as selling old and small houses to buy large houses. Since the mortgage interest rate has been much lower than the high point, some people among the replacement crowd also have the idea of lowering the loan interest rate while changing houses.
The Middle Finger Research Institute believes that the strong recovery momentum of the Chengdu real estate market is due to the continuous ferment of the two concentrated new policies in the middle and end of last year, and the fact that the market is no longer disturbed by unconventional factors such as last year’s high-temperature power cuts and epidemic closures. The demand for home ownership was released smoothly and showed the characteristics of concentrated explosion.
Wu Qiang also believes that this wave of second-hand housing market in Chengdu does have the characteristics of a concentrated explosion of demand, and it cannot be ruled out that there may be a certain degree of decline in the future, and then enter a stable period.
