“The policy of prohibiting ‘commercial-to-residential’ changes has affected the activity of the commercial and residential apartment market. Buyers and speculators are more cautious when it comes to commercial and residential apartments, and continued decline in volume will bring down prices.
Editor’s note: This article comes from Zhongjing Jingwei , author: Xu Shiming, authorized reprint .
Recently, the Foshan Housing and Urban-Rural Development Bureau issued a notice prohibiting commercial apartments from being changed. Since 2017, Beijing, Tianjin, Guangzhou, Shenzhen, Xiamen and other 16 places have successively issued policies restricting “commercial reform and housing.” From the perspective of comprehensive multi-regional control policies, it must not be changed into residential use without authorization as a basic principle.
16 city issued a policy to restrict “commercial reform and housing”
A list of policies restricting “commercial reform and housing” introduced by various cities since 2017 Source: Zhuge to find a house
Since Beijing issued a regulatory policy for commercial projects in March 2017, first-tier cities such as Shanghai, Guangzhou, Shenzhen, and Chengdu and some hot-spot second-tier cities have followed closely. By August 2019, Xiamen has issued the most stringent ” “Prohibition of apartment orders”, “commercial reform office”, “commercial reform residence” are all eliminated.
According to the statistics of Zhuge’s housing search, since 2017, 16 places including Beijing, Tianjin, Guangzhou, Shenzhen, and Xiamen have successively issued policies restricting “commercial reform and housing.” From the perspective of the distribution of cities, the first-tier cities and hot-spot second-tier cities are the main ones, and the Yangtze River Delta and the Pearl River Delta regions are concentrated.
Yan Zhuge’s analysis of finding a house said that from the perspective of the policy, in addition to regulating the commercial nature of prohibiting the conversion to residential use as the basic condition of each city’s policy, for example, Beijing also stipulated that the minimum divided unit must not be less than 500 square meters and used Commercial projects must be sold in full payment and other items; Shenzhen, Chengdu and other places focus on product design management and control at the supply side; Beijing and Guangzhou stipulate that the purchased commercial properties cannot be transferred to individuals and can only be transferred to legal entities.
The apartment market is facing cooling
“Policy prohibiting ‘commercial reform and housing’ has affected the activity of the commercial and residential apartment market,And speculators are more cautious when it comes to commercial and residential apartments, and continued decline in volume will bring down prices. Zhuge Xunfang said that, overall, Beijing and Shanghai were severely affected by the policy, which was a fatal blow to the apartment market, with both volume and price falling; again for Guangzhou; Nanjing and Dongguan had mild effects, and volume and price fell slightly; Shenzhen Due to the particularity of its market, the serious lack of commercial housing, and the apartment market is driven by high-end demand customers. The market has maintained an overall rise after the policy was introduced, but it has no reference significance for other cities.
“Prohibition of ‘commercial change to residence’ makes some commercial housings unavailable, and the market is not attractive. At this time, it will cause inventory problems.” Yan Yuejin, research director of the Think Tank Center of the E-House Research Institute, accepts customers from China and Singapore Said in the interview.
Tang Zhongxin Jingwei, photo by Dong Wenbo
It is worth noting that in addition to restricting “commercial reform and housing”, Beijing, Shanghai, Guangzhou, Shenzhen and other cities have introduced policies to encourage “commercial reform and rent”, providing another way out for commercial-use housing .
Nevertheless, Zhuge Xunfang said that the current commercial and residential apartment projects in the market are generally surplus, and the strict specification of this product has made it impossible for developers to explore legal space for commercial and residential apartment products. Although some cities have introduced a policy to encourage “commercial-to-rental reform” and the implementation of “commercial-to-rental reform” is also in line with market demand, the implementation process lacks supporting policies and the overall implementation is not ideal. In the future, the apartment market will still be mainly destocking. In addition, the policy is not expected to be liberalized in the short term, and the policy may spread from first-tier and hot second-tier cities to other cities, and the apartment market will face a cooling crisis.
Commercial real estate investment and sales both drop
In January-October 2019, the sales area of commercial housing was 1,332.51 million square meters, and the growth rate changed from negative to positive for the first time this year, an increase of 0.1% year-on-year, and a decrease of 0.1% from January to September. Among them, the sales area of office buildings decreased by 11.9%, and the sales area of commercial buildings fell by 14.0%. In terms of sales of commercial housing, from January to October it increased by 7.3% year-on-year, of which residential sales increased by 10.8%, office building sales fell by 11.5%, and sales of commercial buildings fell by 13.4%.
The decline in sales of commercial real estate is also accompanied by the decline in investment. From January to October 2019, the investment in the development of office buildings and commercial business buildings was 1,597.5 billion yuan, a decrease of 82.2 billion yuan compared with the same period in 2018.. According to the data released by the National Bureau of Statistics, in the past three years, the proportion of investment in development of office buildings and commercial buildings in the overall real estate has continued to decline. In January-October 2017, the proportion of development investment in office buildings and commercial business buildings accounted for 20.62% of the total real estate, 16.91% in January-October 2018, and 14.58% in January-October 2019.
With regard to the decline in investment in commercial real estate development, Yan Yuejin believes that the development investment in the residential market starts to go down. Commercial real estate itself does not account for the largest proportion, and it is also affected by the residential market. The current bad market conditions will also bring some impact and pressure on commercial real estate investment.
“This is also related to local government factors. For example, Hohhot clearly stipulates that commercial land that has obtained the right to use is allowed to be adjusted to commercial housing land, the maximum adjustment rate is 50%. Objectively, some commercial real estate development and investment data Conversion into residential investment will also reduce the data on commercial real estate development investment. “Yan Yuejin added.