China Index Research Institute: From January to September, the sales area of newly built commercial housing nationwide fell 17.1% year-on-year, and the decline continued to narrow

The Zhitong Finance App learned that in January-September, the China Index Research Institute published an article stating that in January-September, the sales area of newly built commercial housing was 70 million square meters, down 17.1% year on year. Sales of newly built commercial housing were 6.9 trillion yuan, down 22.7% year on year, and the declines all continued to narrow. According to the data, at the national level, residents' willingness to buy homes has recovered. The cumulative year-on-year decline in sales and sales area of newly built commercial housing continued to narrow. Among them, the cumulative year-on-year decline in sales area has been narrowing for 4 consecutive months, and sales have been narrowing for 5 consecutive months. At the level of key cities, market sentiment improved markedly after the introduction of support policies at the end of September, and market popularity in core cities increased significantly during the National Day holiday compared to before the holiday season.

The China Index Research Institute said that at present, there is a clear trend of “stabilization” in the core city market, and residents' confidence in buying property has recovered. It is expected that the new policy will continue to be effective in the short term, and there may be a marked increase in market sales data for October. In the fourth quarter, it is expected that the implementation of the “package” supporting policy for real estate will accelerate, and market volume and price in core cities may bottom out and stabilize, thus providing important support for the national market to bottom up. The year-on-year decline in new home sales across the country is also expected to continue to narrow.

Demand: In January-September, the sales area of newly built commercial housing was 70 million square meters, down 17.1% year on year. Sales of newly built commercial housing were 6.9 trillion yuan, down 22.7% year on year, and the decline continued to narrow

Figure: The cumulative sales area of newly built commercial housing in the country and the year-on-year growth rate of sales since 2014

Sales area: From January to September 2024, the sales area of newly built commercial housing was 700 million square meters, down 17.1% year on year. The decline was 0.9 percentage points narrower than in January-August. The monthly sales area of commercial housing in September was 100 million square meters, down 11.0% year on year (the monthly growth rate is estimated after adjustment, same below), and the decline was 1.6 percentage points narrower than August. Among them, the sales area of newly built residential buildings was 590 million square meters, down 19.2% year on year. The decline was 1.2 percentage points narrower than in January-August. The sales area of office buildings decreased 9.8% year on year, and the sales area of commercial housing decreased 4.8% year on year.

Sales: From January to September 2024, sales of newly built commercial housing were 6.9 trillion yuan, down 22.7% year on year. The decline was 0.9 percentage points narrower than in January-August. The monthly sales volume of commercial housing in September was 0.9 trillion yuan, down 16.3% year on year, and 0.9 percentage points narrower than August. Among them, sales of newly built homes were 6.0 trillion yuan, down 24.0% year on year. The decline was 1.0 percentage point narrower than in January-August, office building sales fell 12.7% year on year, and commercial housing sales fell 12.2% year on year.

Supply: In January-September, real estate development investment fell 10.1% year on year; new housing construction area fell 22.2% year on year, and the decline narrowed for 7 consecutive months

Figure: The cumulative investment in real estate and residential development from 2014 to the present and its year-on-year growth rate

Real estate development investment: From January to September 2024, the country's real estate development investment amount was 7.9 trillion yuan, down 10.1% year on year; in September alone, the national real estate development investment amount was 0.9 trillion yuan, down 9.4% year on year, and the decline was 0.8 percentage points narrower than in August. Among them, the amount of investment in residential development was 6.0 trillion yuan, down 10.5% year on year. The decline was the same as in January-August, accounting for 75.9% of real estate development investment.

Figure: The cumulative number of new housing starts and construction area in the country since 2014 and its year-on-year growth rate

New housing construction area: From January to September 2024, the country's new housing construction area was 560 million square meters, down 22.2% year on year, and the decline was 0.3 percentage points narrower than in January-August; in September alone, the country's new housing construction area was about 65.86 million square meters, down 19.9% year on year. Among them, the new residential construction area was 410 million square meters, a year-on-year decrease of 22.4%, and the decline was 0.6 percentage points narrower than in January-August.

Housing construction area: From January to September 2024, the country's housing construction area was 7.16 billion square meters, a year-on-year decrease of 12.2%. Among them, the residential construction area was 5.01 billion square meters, a year-on-year decrease of 12.7%.

Housing completed area: From January to September 2024, the country's completed housing area was 370 million square meters, a year-on-year decrease of 24.4%. Among them, the completed residential area was 270 million square meters, a year-on-year decrease of 23.9%.

Funding source: In January-September, housing enterprises received 7.9 trillion yuan in capital, a year-on-year decrease of 20.0%, and the decline narrowed for 6 consecutive months

Figure: Comparison of the year-on-year growth rate of capital available to housing enterprises across the country from 2015 to the present and the year-on-year growth rate of various funding sources from January to September 2024

Funding available for real estate development companies: From January to September 2024, real estate development companies received 7.9 trillion yuan in capital, a year-on-year decrease of 20.0%, and the decline was 0.2 percentage points narrower than in January-August.

Domestic loans: From January to September 2024, domestic loans were 1.1 trillion yuan, a year-on-year decrease of 6.2%; accounting for 14.5%, an increase of 2.2 percentage points over the same period last year.

Self-financing: From January to September 2024, self-financing was 2.9 trillion yuan, down 9.1% from the previous year, and the decline was 0.7 percentage points higher than in January-August; accounting for 36.4%, an increase of 4.5 percentage points over the same period last year.

Deposit and advance payments: From January to September 2024, deposits and advance payments were 2.4 trillion yuan, down 29.8% year on year. The decline was 0.4 percentage points narrower than in January-August; the proportion was 29.9%, down 4.4 percentage points from the same period last year.

Personal mortgage loans: From January to September 2024, personal mortgage loans were 1.1 trillion yuan, down 34.9% year on year. The decline was 0.9 percentage points narrower than in January-August; the proportion was 14.0%, down 3.4 percentage points from the same period last year.

According to data from the National Bureau of Statistics, in the first three quarters of this year, the gross domestic product increased 4.8% year on year, of which the third quarter increased 4.6% year on year. On 10.17, the Ministry of Housing and Construction called a press conference and proposed a “combo punch” of policies, involving four cancellations, four reductions, and two increases. Two of these are incremental policies: implementing 1 million urban village renovation and dilapidated housing renovation through monetized resettlement, increasing the credit scale for the “white list” project to 4 trillion dollars by the end of the year, continuing to inject confidence into the market. At the local level, first-tier cities actively implemented the spirit of the central government, concentrating on optimizing property market policies at the end of September, Guangzhou completely abolished purchase restrictions, Beijing, Shanghai, and Shenzhen optimized purchase restrictions and loan restrictions. Beijing and Shanghai clearly abolish general housing certification standards in a timely manner, Shenzhen abolish sales restrictions, and Shanghai and Shenzhen “5 to 2.”

According to China Index monitoring, the average number of subscriptions for most core city research projects during the National Day holiday exceeded the full month of September. Judging from online signing data, the week after the National Day (10.7-10.13), the sales area of newly built commercial residential homes in Shanghai, Guangzhou, Shenzhen, and Hangzhou increased by 5.6%, 32.9%, 57.4%, and 117.8%, respectively.

Currently, the core city market is clearly “stabilizing”, and residents' confidence in buying property has recovered. It is expected that the new policy will continue to be effective in the short term, and market sales data for October may increase markedly. In the fourth quarter, it is expected that the implementation of the “package” supporting policy for real estate will accelerate, and market volume and price in core cities may bottom out and stabilize, thus providing important support for the national market to bottom up. The year-on-year decline in new home sales across the country is also expected to continue to narrow.