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Although the industry scale has passed the peak, the demand scale of the real estate market to be released is still considerable under the new pattern of urban population competition from the perspective of various indicators of population change.

The population change in 2023 shows several characteristics:

1. The permanent population of the four first tier cities has collectively become "regular", and 24 of the 26 cities with a GDP of more than one trillion yuan have seen their permanent population grow.

2. The new population of Shanghai, Chengdu, Hangzhou, Zhengzhou, Hefei, Shenzhen and other cities exceeded 100000, and the growth rate of permanent population rebounded. Hefei's population growth exceeded Hangzhou, Chengdu and other cities, ranking first.

3. In core cities, kindergartens and young children have all dropped, and only three cities with a population of 10 million have dropped by less than 6%.

4. The number of children from Changsha and Ningbo is in the forefront, and more than 20% of children from Wenzhou and Fuzhou go to school outside the city.

5. Guangzhou, Wuhan and other five cities have more than one million college students, and Zhengzhou has more than 10% of the permanent population of college students.

The increasing population index is not only promoting the urban economic development, but also an important pillar to stabilize the urban housing demand. The industry scale has entered the adjustment period, and the population agglomeration will still support the development of core city demand. Taking 76 cities as samples, this paper studies and judges the new pattern of urban population competition based on indicators such as population development, housing conditions, housing purchase pressure, and population structure. After calculation, the top six cities in terms of urban demand scale are Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu, and Hangzhou.

In 2022 and 2023, the total birth size of China's population has dropped below 10 million for two consecutive years, and the total population size has declined for two consecutive years, and the decline is also expanding. China has also become one of the countries with negative population growth.

At the same time of negative population growth, China's urban population is still growing.

According to the statistics bureau, China's urbanization rate will reach 66.16% in 2023, 0.94 percentage points higher than that in 2022. This growth rate increased by 0.44 percentage points compared with 0.50 percentage points of the urbanization rate in 2022, and the urbanization rate growth rate increased significantly. At the same time, the urbanization rate of China's registered population is less than 50%, significantly slower than that of the permanent population.

Compared with the current per capita housing level of 40 square meters, the urban population increase of 11.96 million in 2023 represents 478 million housing incremental demand, which also practically expands the scale of China's urban housing demand. China is still in the stage of sustainable urbanization development, and the number of new urban population in 2023 will be huge, which is where the development space of the future real estate market lies.

From the perspective of cities, with the help of the relaxation of the threshold for settlement and the recovery of industries, the permanent population of several economically strong cities has rebounded, especially the first tier and four cities have reversed the negative growth trend in 2022, and the permanent population will achieve positive growth in 2023. Among them, Shanghai increased 115600 people, Guangzhou increased 92900 people, Beijing increased 15000 people, and Shenzhen increased 128300 people.

Not only the first tier cities, but also the permanent population of most second tier cities is showing a positive growth trend. According to the data published in the statistical bulletin of each city, 24 of the 26 cities with a GDP of more than one trillion yuan have permanent population growth (only Chongqing and Yantai have negative growth).

By the end of 2023, the national population will be 1409.67 million, 2.08 million fewer than that at the end of the previous year. In the near future, most cities will face the reality that the population growth rate will slow or decline due to the limitation of the total amount.

Due to the difference in industrial recovery, settlement threshold and income level, the population pattern between cities is significantly differentiated. The permanent population of economically strong cities is still rising, and the permanent population of first and second tier cities with strong economic strength is still increasing to varying degrees. Among them, Hefei ranks first in terms of population growth in 2023, with a permanent population growth of 219000, followed by Zhengzhou and Hangzhou. In addition, the permanent population growth of Chengdu, Shenzhen, Shanghai and other cities exceeded 100000, and the population agglomeration situation was relatively prominent.

At the same time, the permanent population of Chongqing, the largest city with the largest population in China, has significantly shrunk. In 2023, the permanent population will fall to 31.9143 million, a reduction of 219000. Changsha, the first city with permanent population growth in 2022, will have a total permanent population of 10.5131 million by the end of 2023, 93000 more than that in 2022, and the increase will fall to the eighth place in China.

First tier cities show great resilience. In 2023, the permanent population of the first tier and four cities, whose growth rate of permanent population has slowed down significantly since 2020, will return to positive growth, especially in Shenzhen. By the end of 2023, the permanent population of the city will be 17.7901 million, an increase of 128300 over the end of the previous year, ranking first among the four first tier cities.

Shanghai's population growth ranks second among the four first tier cities, and the permanent population will increase to 24.8745 million in 2023; Compared with the end of 2022 (24.7589 million people), it increased by 115600 people. This figure is also the first time since the 13th Five Year Plan put forward the goal of long-term population regulation and control that the increase has exceeded 100000 people. According to the rail transit data in 2024, the total passenger flow of Shanghai Metro will reach 13.397 million person times (excluding the Maglev line) on March 8, 2024, setting a new record of 13.294 million person times on March 8, 2019. The scale of rail transit travel has reached a new high, which also shows the super population agglomeration capacity of Shanghai to some extent.

In addition, the population of Beijing will increase by 15000 to 21.858 million at the end of 2023 for the first time since the "six consecutive drops".

Housing improvement has become the main driving force of the current demand increment market.

According to the two indicators of per capita housing area and housing price income ratio, the per capita housing and housing price income ratio in Dongguan, Quanzhou and Shaoxing are "double high", and the demand pressure for improvement is greater; Although Beijing, Shanghai, Shenzhen and other first tier cities are difficult to purchase, their housing saturation is still low, and their risk resistance is relatively good.

1. The per capita housing area in the first and second tier cities is less than 40 ㎡, and Xiamen, Hefei and other cities still have large development space

The per capita housing area of all residents in China has exceeded 41 square meters, and the per capita number of housing units has also reached 1.2, which means there is no shortage of housing in terms of the total amount.

There are also large differences between different city levels. The per capita housing area of the first and second tier cities is low, and most of them still have some room for improvement. The average residential housing area of 19 sample cities is 38.5 square meters, and the average of the first tier cities is only 35 square meters; The per capita housing area in third and fourth tier cities is relatively high, reaching 47.5 square meters, and the improvement space is relatively small.

2. The ratio of per capita housing and housing price income is "double high", and the demand for improvement in Quanzhou and Shaoxing is facing greater pressure

Considering that there are large differences between the housing price level and the income level of each city, even if the per capita housing area is at a low level, if the purchasing power is at the "short board" position, it is also difficult to transform the demand for improvement. Therefore, we consider both the per capita housing area and the housing price income ratio to more accurately reflect the improvement needs of cities.

Top 50 cities can be divided into four types:

(1) Low improvement space and low transformation capacity. Dongguan, Quanzhou and Shaoxing are typical examples. The per capita housing area in such cities has been at a high level, and the potential improvement space has been small. At the same time, since 2016, the housing price level in the Yangtze River Delta and the Pearl River Delta third and fourth tier cities has risen rapidly, but the income level has not risen significantly at the same time. Therefore, the housing price income ratio has been more than 13 years, and the difficulty of buying houses has increased significantly, The demand for improvement is under greater pressure.

(2) Low improvement space and high transformation capacity. Zhenjiang, Wenzhou and Yancheng are typical examples. In 2023, the per capita housing area of the three cities will be more than 45 square meters, but their house price income ratio will be within a reasonable range of 7-8 years. The conversion capacity of purchase demand is relatively high. In general, there is still a certain demand for improvement in these cities.

(3) High improvement space and low demand transformation. The front-line and new front-line of high housing prices in Beijing, Shanghai, Shenzhen and Hangzhou are typical examples. Affected by the high housing prices, the per capita housing area ownership in such cities is at a low level, mostly below 40 square meters, with a large potential improvement space; It is also affected by the high housing price. The housing price income ratio in such cities is more than 15 years. It is difficult to purchase houses and the demand transformation ability is general, which restricts the potential housing increment. However, considering its strong anti risk ability, we can still take a high look.

(4) High improvement space and high demand transformation. Lanzhou, Urumqi, Shenyang and other cities are typical examples. The per capita housing situation in such cities is low, mostly below 40 square meters, and there is a large potential demand for improvement; At the same time, due to the relatively biased location and relatively low housing price, the housing price income ratio is mostly less than 8 years, and the demand transformation ability is strong. In general, such cities have better demand for improvement in theory. It is worth noting that most of these cities are located in the northwest or northeast regions, and their population competitiveness is general. The specific scale of improvement needs to be further judged.

From the perspective of population structure, there are two important changes. One is that the number of children in kindergartens in most cities has declined, and the other is that the pace of university enrollment expansion has slowed down in 2023.

For a single city, the population of kindergartens is highly related to the number of young families. The increase or decrease in the size of kindergartens represents the actual recognition of young families to live in a certain city, and also represents the change of related rigid housing needs. The number of college students represents the scale of the city's "low-cost" absorption of new employment groups.

1. In core cities, children in kindergartens dropped, and only three cities with a population of 10 million dropped by less than 6%

In 2023, the decline in the number of children in kindergartens has spread to core cities. As far as cities that have released relevant indicator data are concerned, the number of children in kindergartens in all sample cities has declined year on year, with a decline of more than 5%. In 2022, more than 20% of the number of children in kindergartens in cities will remain positive. The general decline in the number of children in kindergartens shows that the decline in the number of births since 2020 has begun to comprehensively affect the long-term population development expectations of all cities, even for core cities with a large number of young immigrants.

In order of decrease, more than half of the cities will have a decrease of more than 10% in the number of children in kindergartens in 2023, including Beijing, Nanjing, Zhengzhou, Xiamen, Qingdao and other cities, and Shanghai and Guangzhou will also have a decrease of more than 9%. Behind the decline in the number of kindergarten children is the decline in the number of newly needed housing, such as marriage housing and school district housing. This is also confirmed by the changes in the transaction structure of the new housing market in recent years.

Among them, Hengyang has the largest decline. In 2023, the number of children in kindergarten will be 150000, down 23% from 2022, down about 47000, and the permanent population will be 80000. In the big cycle of declining fertility and birth population, for third tier cities such as Hengyang, whose population is flowing out, its incremental population is undoubtedly facing greater downward pressure. The simultaneous decline of kindergarten population and permanent population means that a large number of young families move out of the country, and the future "home purchase" will also be affected.

Among the core cities with a permanent population of more than 10 million, only Xi'an, Hangzhou and Wuhan saw a decrease of less than 6% in the number of children in kindergartens. In addition, Hefei (with a permanent population of 9.85 million) saw a relatively small decrease of 5.9%.

The relatively stable number of children in kindergarten represents a more stable level of population turnover in these cities. The housing demand of newly added young families directly related to it can also be maintained at a relatively stable level of magnitude.

2. The number of children from Changsha and Ningbo is in the forefront, and more than 20% of children from Wenzhou and Fuzhou go to school in other places

According to the migration of school-age kindergarten children in typical cities, 45% of the cities are in the state of net migration, and more than half of the cities are in the state of emigration. Among them, Shenzhen, Guangzhou, Wenzhou, Fuzhou and other cities have a large number of emigration, and the number of net outflow children has reached more than 20% of the total number of school-age children. The common characteristics of these cities are that the private economy is relatively developed, there are more immigrants, but the housing price level income ratio is relatively high, and the "stickiness" of cities to immigrants is weak.

However, the immigration and emigration of school-age kindergarten children in Beijing and Shanghai are relatively balanced. Under the severe epidemic pressure in recent years, Shanghai has lost only 4.6% of school-age children, and the loss rate will rise by 1 percentage point in 2023, and the city's population agglomeration capacity will rise again.

Changsha, Ningbo, Hangzhou, Suzhou, Jinhua and other cities with high "stickiness" of migrant population have a large number of kindergarten age children. Take Ningbo, which has an outstanding population inflow in recent years, as an example. In 2023, the number of kindergarten children in Ningbo will reach 262000, about 53000 more than the number of children born at the right age, which is a leading increase in the country. The net inflow of school-age children represents the recognition of young migrant families to these cities. From the perspective of home purchase, the housing demand of migrant families is also more urgent, which will still bring stable incremental housing demand to these cities in the medium term.

3. The number of college students in Guangzhou, Wuhan and other five cities has exceeded one million, and the proportion of college students in Zhengzhou's permanent population has exceeded 10%

In terms of the number of college students, among the sample cities, the number of college students in Guangzhou, Zhengzhou, Wuhan and other five cities has reached more than one million. Guangzhou continues to rank first with 1.47 million college students, among which Chengdu and Chongqing are newly promoted to the level of one million after 2019.

From the perspective of proportion, in the cities that have published relevant data, there is only one city in Zhengzhou where college students account for more than 10%. Zhengzhou, with a permanent population of 13 million, has nearly 1.4 million college students. Zhengzhou, as a regional central city, has a large number of college students, providing ample "granary" for its permanent resident and registered population growth. In 2023, Zhengzhou's permanent resident population will grow by 180000 people, and the registered population will also grow by 120000 people.

The industry scale has entered the adjustment period, and the population agglomeration will still support the development of core city demand.

Based on the indicators such as rigid demand, improvement scale, inter city kindergarten study, and the viscosity of college graduates, the demand supporting force of sample cities was measured quantitatively, and 21 cities with better comprehensive evaluation were selected.

According to the evaluation results in 2024, the four first tier cities in Beijing, Shanghai, Guangzhou and Shenzhen are still in the forefront. Under the leading migrant population base and low per capita housing level in China, the first tier cities still have the most solid foundation for demand development. Chengdu and Hangzhou also rank in the first echelon, and the advantages of the two cities are obvious: large population base and strong attraction to young families.

The second tier cities include Xi'an, Wuhan, Zhengzhou, Chongqing, Foshan, Suzhou and Ningbo. Among them, the rigid demand and improvement scale of Xi'an, Wuhan and Zhengzhou are more balanced. If the supply and demand relationship can be well balanced, the real estate market is expected to go out of the adjustment period faster.

The third tier consists of eight cities, namely Changsha, Dongguan, Tianjin, Hefei, Xiamen, Qingdao, Nanjing and Jinan. If these cities can control the inventory indicators of key development sectors, their new housing market can still achieve good performance. For example, Hefei, as a city with a population of 10 million, even at the cyclical high point of 2018-2021, its new housing market transaction scale has been maintained at less than 9 million square meters, and will be reduced to less than 6 million square meters after 2022, A lower supply and demand scale means a lower inventory volume. In this round of industry scale adjustment since the second half of 2021, the Hefei market has also shown greater development resilience.

For most core cities, there are still many favorable factors for population development. For example, the national urbanization rate is still on the rise, the urbanization rate of household registration in core cities is still far lower than that of the permanent population, the per capita housing area also has a large space for development, and the permanent population is further gathering in core cities. The population inflow brought about by these favorable factors will still cover the negative impact of the declining birth rate for a long time.

However, for most third and fourth tier cities, although there is still a large space for the urbanization rate to develop, under the influence of the continuous outflow of the permanent population, especially the rural population, the urbanization rate is often only a shrinking growth, coupled with the high per capita housing area, the judgment of housing demand development still needs to be cautious.

Source: Ding Zuyu commented on the property market