2017 property market conjecture： regulating and continuing to raise interest rates, expecting house prices to stabilize and mergers and acquisitions to accelerate.

　　The Central Economic Work Conference clearly stated that "the house is for living, not for speculation". Since December 2016, the decision-making level has clearly defined the relevant regulation of real estate six times. How to get to the property market in 2017? Is the house price rising or falling? At the beginning of the new year, four conjectures about the property market surfaced.

　　Regulation persistence

　　On December 14th, 2016, the Central Economic Work Conference has determined the main tone of real estate regulation and control in 2017 — — Devoting inventory and releasing bubbles at the same time, and speeding up the study and establishment of a long-term mechanism for the real estate market. On December 29th and 30th, the Ministry of Housing and Urban-Rural Development issued the Circular of the Party Group of the Ministry of Housing and Urban-Rural Development of the Communist Party of China on Inspection and Rectification, paying close attention to controlling housing prices in hot cities, and destocking in third-and fourth-tier cities and counties. At the same time, it also announced the list of 21 real estate development enterprises with illegal sales. In fact, only in December 2016, the decision-making level has clearly defined the relevant regulation and supervision of real estate six times.

　　Judging from the attitude of the regulatory authorities, maintaining stability is still the core proposition in 2017. It is expected that the regulation of first-and second-tier hotspot cities will continue in 2017, and "house prices will not stop and policies will not stop", which is also in line with the macro background of preventing and controlling financial risks. At the same time, supply-side structural reforms such as destocking in third-and fourth-tier cities will also be continued. In addition to major policy support, it may also be integrated with improving the "fundamentals" of the whole city. The regulation of each city is expected to be upgraded to "one city, one policy" according to the actual situation of each place.

　　Expectation of interest rate increase

　　The fiery real estate market in the first three quarters of 2016 has a lot to do with the loose credit policy, and credit is one of the important factors affecting short-term housing prices. After the implementation of "recognizing houses and loans" in Shanghai, on December 23, 2016, Zhengzhou became the second city to "recognize houses and loans". Will this most stringent regulatory policy be rolled out and become a hot city? The sword of Damocles hangs over the head. The introduction of this policy will also directly affect the transaction volume of the real estate market and the trend of housing prices.

　　In mid-December 2016, the Federal Reserve announced a rate hike and gave the expectation of raising interest rates three times this year, and the RMB was expected to depreciate. This rate hike may indicate that the United States has entered a rate hike cycle. Once confirmed, other countries will be forced to follow the example of the United States. This will not happen in the short term, but the interest rate increase operation is bound to weaken investment demand and curb consumption. "Once the interest rate is raised (or the capital price rises too fast), it represents a change in the orientation of financial policy. If the RMB depreciates and capital flows out, it will definitely lead to a revaluation of housing prices in China, and the adjustment of asset prices denominated in RMB is a high probability. " Insiders said.

　　House prices have stabilized.

　　Although the government is increasing regulation, if the house price drops sharply, it is certainly not the original intention of the regulatory authorities. In 2017, the real estate market will enter a small adjustment period, and the house price will be "stable", and there may be a slight increase or decline. "Big ups and downs" are all unwilling to be seen by the government.

　　According to the reports released by the real estate research departments of several securities companies, for 2017, the forecasts of the institutions for the transaction volume are basically the same, and they all think that the sales area of houses will decline. Founder Securities is the most optimistic, predicting a 6% decline, and the most pessimistic CIC Securities is expected to fall by 18%. Of course, the representative view is that the sales area of first-tier, second-tier and third-tier cities will present different situations due to the influence of policies. Fewer people buy houses, which will naturally affect house prices. Most institutions predict that the fluctuation range of house prices in 2017 will be within plus or minus 3%. The typical view is that the average national sales price was flat in the first half of 2017, and returned to the upward trend in the second half of the year with the loosening of policies.

　　Ren Zeping, chief economist of Founder Securities, pointed out that in recent rounds, the price cycle has been rising for a long time and adjusting for a short time, with an average of about 36 months, in which the average price cycle has been rising for 24 months and adjusting for 12 months. At present, the price increase is slowing down. According to the adjustment cycle of about 12 months, it is expected that the price will be adjusted to the end of 2017 to the first half of 2018.

　　M&A acceleration

　　In recent years, the tide of mergers and acquisitions in the real estate industry has begun to emerge. With the tightening of financing channels for housing enterprises and the improvement of land acquisition thresholds in first-and second-tier cities, the integration of developers will be further accelerated in 2017.

　　If small and medium-sized housing enterprises with land in their hands but weak development ability cannot make profits through the development model, the phenomenon of selling land and equity may appear frequently; If there is a listed company without land, perhaps the whole enterprise will be sold as a shell. For large developers with sufficient ammunition, they will look for development opportunities and suitable assets in the secondary market, or buy small developers with tight cash flow. Not only that, from the real estate market of various cities now, once large developers enter, the living space of small and medium-sized developers is already facing the situation of continuous compression.

　　Of course, despite the rising cost of land acquisition, developers continue to dig deep into first-tier cities and second-tier key cities. In order to reduce risks and share costs, many developers may choose to unite with other developers or seek the alliance of financial institutions such as insurance companies.

　　Beijing Morning Post reporter Yang Yi