10/21/2021 Financial News in China: Housing Prices In 70 Cities Turned Down For The First Time; Evergrande Cancelled 20 Billion Transactions!

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1.CCP Leaders Liu He And Guo Shuqing, Overall Risk Of Real Estate Market Is Controllable!

On October 20th, Liu He, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, said in a written speech at the 2021 Financial Street Forum that at present, there are some problems in the real estate market, but the overall risk is controllable, reasonable funding needs are being met, and the overall situation of the healthy development of the real estate market will not change.

Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission, said at the 2021 Financial Street Forum construction industry has broad development prospects. In the next few decades, the construction industry will continue to be a pillar industry, and the environmental protection industry, which is closely linked to it, is also expected to become an emerging pillar industry.

2.CCP Leaders Yi Gang And Pan Gongsheng: We Will Protect The Legitimate Rights And Interests Of Housing Consumers

In response to a well-known real estate company’s question at the G30 International Banking Conference a few days ago, Central Bank Governor Yi Gang said that the real estate company’s risk is a case-by-case risk. In particular, we must protect the legitimate rights and interests of consumers who have purchased houses. Pan Gongsheng, deputy governor of the central bank and director of the foreign exchange bureau, also stated at the 2021 Financial Street Forum that the financial sector will actively cooperate with the Ministry of Housing and Urban-Rural Development and local governments to firmly maintain the healthy development of the real estate market and safeguard the legitimate rights and interests of housing consumers.

Comment: Under the CCP authoritarian regime, it is abnormal that all the relevant leaders stand up to talk about real estate market. Their aim is to boost confidence in the market which gives important information to you that the market is collapsing.

3.A Weaker U.S. Dollar And Strong Demand For Foreign Exchange Settlement, The RMB Exchange Rate Returned To 6.38

The U.S. dollar index has fallen from a high level, and the demand for settlement of foreign exchange from customers is strong, and the RMB exchange rate has been rising recently. On October 20, the onshore and offshore RMB exchange rates against the US dollar both recovered the 6.38 mark. Among them, the onshore renminbi exchange rate hit 6.3794, and the offshore RMB exchange rate once rose to 6.3734. On the 19th, the onshore and offshore renminbi exchange rates broke through the 6.40 important psychological barrier, breaking the previous four-month consolidation pattern.

4.Zhongyuan Real Estate Issued An Internal Document: Market Downturn, Moderately Shrinking Scale And Retaining Core Resources For “The Winter”

On October 20, the veteran real estate agency Zhongyuan Real Estate issued an internal document stating, “Due to the continued market downturn, in order to retain core resources to survive the cold winter, the group decided to adjust the scale and structure of the mainland business. All branches must make appropriate contraction in response to their own operating conditions, and aim to achieve a balance of payments in the fourth quarter.” The document also pointed out that the seven branches in Hefei, Zhengzhou, Jinan, Nanchang, Harbin, Nanjing, and Ningbo have adjusted their internal organization to the business unit operation, which requires a significant reduction in the scale of operations.

Comment: This company is a very big real estate agency which have almost branched in every big city in China. This news shows that the CCP real estate market is now in winter.

5.Housing Prices In 70 Cities Turned Down For The First Time, And The Second-Hand Housing Market Will Further Cool Down

On October 20, the National Bureau of Statistics released the changes in the sales prices of commercial housing in 70 large and medium-sized cities in September 2021.The sales price data of commercial housing in 70 large and medium-sized cities in September 2021 shows that the price of new houses in more than half of the cities has fallen from the previous month, and the price of second-hand houses in more than 70% of the cities has fallen from the previous month. This kind of decline is very rare in the development of the real estate market for decades.

The price of second-hand housing is falling in 52 cities in September. Based on this, it can be considered that about three-quarters of the cities have seen significant price cuts. In fact, subsequent price reduction actions will increase. Recently, some landlords still bite the price or simply refuse to sell, but it is estimated that various price reduction phenomena will still increase in the subsequent market operation

6.Real Estate Tax Pilot Cities Are Coming, First-Line Real Estate Speculators Begin To Sell Surplus Real Estate In Panic

According to a report from China Business News, “Recently, some of the owners who hold multiple suites in their hands originally rented their houses on our side. Now they have to terminate their contracts in advance, preferring to pay liquidated damages. According to them, they are now anxious to sell their houses.” An insider with a large market share housing leasing agency said.

As of October 19, the number of second-hand housing listings in Beijing was 89,400. In the previous June to August, the listing data of Lianjia were 76,600, 78,100, and 82,600. In other words, in more than three months, the number of second-hand housing listings in Beijing increased by more than 10,000 sets.

7.Evergrande Cancelled Selling: Just Announced The Termination Of 20 Billion Transactions!

On the evening of the 20th, China Evergrande, Evergrande Property and Hopson Development also issued an announcement saying that China Evergrande’s transfer of the equity of Evergrande Property to Hopson Group’s transactions has been terminated, and the shares of the three will resume trading tomorrow.

It is worth mentioning that the termination was proposed by Evergrande. Evergrande claimed that the transferee failed to meet the prerequisites for making a comprehensive tender offer for the shares of Evergrande Property. Hopson Development stated that it would not accept it because the seller proposed to modify the payment terms. The seller claims to cancel or terminate any substance of the agreement.

8.Beijing Housing Loan Market: Bank Loan Quotas Are Still Tight And Some Banks Are Still In A State Of Suspension

Recently, a reporter from “Securities Daily” visited many bank branches in Beijing and found that major banks are still facing the problem of insufficient personal housing loan quotas, and even some bank branches’ new and second-hand housing loan business is still suspended, and quotas have not been relaxed.

Since the second half of this year, many state-owned banks, joint-stock banks and city commercial banks in Beijing, Shanghai, Guangzhou, Shenzhen and other four major first-tier cities have begun to tighten their mortgages, and the mortgage application cycle has also lengthened, generally more than 3 months. Many banks said that loan lines are tight. Many lenders reported that they need to wait in line to apply for bank loans, and some banks even stopped lending to second-hand houses. In addition, banks have become more stringent in their approval of the source of funds and qualifications.

【G Translators- Financial Team】
Author: Andrew

Disclaimer: This article only represents the author’s view. Gnews is not responsible for any legal risks.

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