Status of New Real Estate Registration Policy
After many years of preparation, the new Real Estate Registration Policy was introduced on March 1st. Pan Shiyi, Chinese business magnate and Chairman of SOHO China, quotes:
“If the Real Estate Registration System is set up, property prices will fall immediately.”
However, it will not greatly affect the property prices instantly. The second-hand housing turnover will continue rising, yet there will be significantly less selling.
No Significant Changes in New House Market
The past three weeks have shown that even after the Real Estate Registration Policy was implemented, there still was little impact on the new housing market. There is virtually no underselling, else the house prices would had been dropping.
Central Sichuan (CS) recently released data showing that the main Chengdu districts and its surrounding suburban commercial space covered 87,500 m² and 150,500 m² , respectively. The average commercial building sale tends to be 70–90 m², accounting for 36% of total building sales; the sales for 150 m² apartments dropped to 13%, down 7 percentage points from last year.
Jiang Xiaodong, Chairman of Quan Chen, stated:
“The Real Estate Registration Policy’s core purpose is to protect the legitimate rights and interests of property. It is not intended to control the property market.”
After the completion of the System, national housing information is expected to be more accurate. The key factors that drive the real estate market are supply and demand and market expectations. Although the market will be partially affected by the Real Estate Registration System, this influence is limited and inconclusive. It will not cause dramatic increases or decreases in housing prices.
Second-Hand Housing and the Future Sell-off
Last week in Chengdu and its suburbs, 876 second-hand housing turnovers went up with an astonishing 80.71%; closing an area of 81,500 m². With the end of the Spring Festival holiday, the second-hand housing market has seen a gradual increase in house viewings given that turnover keeps rising. This is due to the traditional Spring Festival holiday as well as the Central Bank cutting interest rates on March 1st. Despite this growth in second-hand house viewing, it has not yet translated into an increase in second-hand house purchasing.
Jiang Xiaodong said that, after the carrying out of the Real Estate Registration Policy, the impact on the second-hand housing will be slightly larger:
“People are worried about the investment property tax, income tax and falling house prices and owners of multiple houses do not want to be known about all the properties they have.”
This concern among landlords is expected to result in a sizable increase in the selling of houses for the coming period. Jiang continues:
“Property tax in intended to promote the real estate market. Currently, the market still faces a lot of problems — disabling it to carry out the property tax right now.”
