Recently, some developers have increased their launch efforts. Guangzhou's property market is offering “zero down payment” and “down payment advances,” Hangzhou is seeing a second wave of price cuts, with some developers competing to lower prices, and in Chengdu, developers have also increased promotional efforts.

　　The current nationwide property market is clearly cooling. With the cancellation of government price caps, some developers are cutting prices to boost sales, and homebuyer expectations are quietly shifting…… The various new situations that have emerged this year all indicate that the property market is bidding farewell to the “policy market” and beginning to enter the era of marketization. Industry insiders say the current market-oriented adjustment will further highlight risks, and both government regulation and real estate enterprises will face tests.

 

　　Property markets in many places increase launch efforts

 

 

　　Recently, Guangzhou suspended the widely criticized “dual contract” practice, seen as the beginning of canceling government price caps and shifting to market-oriented regulation. Under the rules, developers must first sign a “Commercial Housing Presale Commitment Letter” when applying for a presale permit, promising not to use dual contracts for sales, or they will face administrative penalties for violations.

 

　　Not only the government, but enterprises are also judging the property market outlook more rationally. Data show that in the first quarter, nationwide new housing construction area fell 25.2% year on year, and real estate (market quote section) development investment continued to slow. On the sales side, some developers have recently increased their launch efforts. Guangzhou's property market is offering “zero down payment” and “down payment advances,” Hangzhou is seeing a second wave of price cuts, with some developers competing to lower prices, and in Chengdu, developers have also increased promotional efforts.

 

　　“Previously, real estate companies focused on government regulatory policies, but now they pay more attention to the market itself. This year, the internal factors of the market will gradually emerge, and the hand of the market will gradually play its role. Developers have to take measures to promote sales out of consideration for their own capital chain risks; these are normal and reasonable market reactions,” said Chen Zhun, director of the China Urban and Rural Construction Economic Research Institute.

 

　　Complex situation tests regulatory capability

 

　　A sharp drop in transaction volume, obvious cooling in the land markets of second- and third-tier cities, the arrival of a second wave of price cuts, and prominent capital chain risks for small and medium-sized real estate companies…… Against an increasingly complex backdrop, the government's regulatory capability and wisdom are once again being tested.

 

　　Industry insiders say that after the real estate market begins to enter market-oriented adjustment, some problems previously concealed under government macro-control will gradually be exposed. Meanwhile, the macroeconomy faces considerable downward pressure, and the property market adjustment is dragging on the economy. The intricate situation will test the government's ability to build a long-term mechanism and its regulatory capability, and property market regulation should pay more attention to marketization, long-term effectiveness, and differentiation.

 

　　“The biggest pressure on economic growth this year is undoubtedly the property market adjustment. The government cannot adopt the old method of ‘supporting the market,’ causing the property market adjustment to fail again,” said Wang Xiaoguang, a professor at the Chinese Academy of Governance.

 

　　Liquidity risks of real estate companies become prominent

 

　　After the debt default of Zhejiang Xingrun Real Estate, several other real estate companies have recently encountered problems in their capital chains. Industry insiders say that as the property market bids farewell to its golden decade, developers accustomed to surviving in a policy environment rather than a market environment will directly face market risks and challenges.

 

　　“The challenges facing real estate developers this year are very complex and require great attention,” Chen Zhun said. “The market's survival-of-the-fittest mechanism will become increasingly obvious.”

 

　　Tightening credit conditions and slowing sales have highlighted liquidity risks, becoming the biggest problem currently facing developers. Chen Yifeng, director and general manager of Dexin Capital, said the real estate market is now entering a weak cycle, and liquidity risk will become the main risk.