From 2024, the trend of the property market will be basically clear

▼ Text|Lao Mo

01 / Many of us don't understand this big move of the central bank.

On January 5, at the beginning of the new year, the central bank and the State Administration of Financial Supervision jointly issued a blockbuster document, which I think is very interesting: first, financial support for leasing to mainly solve the housing problem of new citizens and young people in big cities, and second, support for all kinds of entities to build, renovate and operate long-term rental housing.

There are too many words, let's summarize it directly, in fact, the key word is rental housing reform. In this regard, I think it may be closely related to de-financialization and housing not speculation.

In fact, looking back on the past, whether in Beijing, Shanghai, Guangzhou, Shenzhen or in the county, the core of making money from speculation is to buy and sell housing. And now vigorously promoting the rental market, it may be a disguised dissupport for speculation, coupled with the equality of public services in the later stage, which can also be supported from the side.

For example, as early as August 2022, Shenzhen has begun to "promote the same basic public services as renting and buying houses", which is undoubtedly an important signal.

In this case, in fact, many people did not understand this big move of the central bank. Especially when it comes to affordable housing, it is not completely new, and an important part of it is rebuilt, so what is the reconstruction? I think it is most likely to be commercial housing.

02 / Will house prices fall as a result of the vigorous development of the rental market?

My personal opinion may not be correct, so it is only for objective discussion, without any advice or derogatory remarks. If the high-rise wants to make housing prices rise, in fact, there are really too many methods, just as long as the large-scale demolition and urbanization are continued, there will definitely be people who will buy houses.

But the problem is that if house prices keep rising and incomes don't, the end result may be that the tide recedes. Therefore, as the Ministry of Housing and Urban-Rural Development has always emphasized, the future property market should develop healthily and steadily, which means that the problem of financialization must be solved, that is, the problem of speculation.

However, since the beginning of commercial housing in 1998, after more than 20 years of development, there is indeed a large number of housing in the mainland market. As for how much, because there is no official data, we can only use data from the media for the time being, such as "Yicai":

1. The mainland alone has 557 million square meters of commercial residential area for sale;

2. According to the calculation of 39.8 square meters per capita, it can fully meet the needs of 14 million people.

Theoretically, of course, it works, but the problem is that it is difficult to implement in reality, and even if the developer sells the house at a discount, there will still be people who will block it, let alone cut it in half or even at a discount.

Back to the topic, I think that with the development of the rental market, housing prices may decline slightly in the short term, after all, there is less demand for buying houses, which is also in line with economic logic, but in the long run, the magnitude will not be too large.

The reason is very simple, according to the "People's Data" report, as early as the "2021 Blue Book of China's Urban Rental Life", it has been clearly predicted that the number of housing rentals in mainland cities will exceed 260 million in 2030.

However, unexpectedly, by 2023, the number of renters in mainland China will be close to this number. This undoubtedly shows that the mainland rental market has great potential.

Therefore, the number of renters will continue to increase in the future, and this may ease people's anxiety about selling their homes, especially for non-professional investors, who may not be so anxious.

In fact, the next logic is easy to understand, since we are not in such a hurry, many of us are unlikely to reduce the price or sell the house at a discount. In this case, house prices will fall, but not by too much.

03 / Since next year, the trend of the mainland property market will be basically clear.

In fact, as early as the end of last year, I saw a very meaningful sentence, quoting the Beijing News: In 2023, the mainland real estate market is still a year of deep adjustment. Obviously, the key word is "deep adjustment".

Have you ever thought about how the property market will go in 2024? There is no doubt that the general tone must be healthy and stable, and at this time you must be more concerned about the details, such as the rental market is one of the key points under the premise of housing not speculation.

In fact, if we look back, fundamentally speaking, affordable housing itself also has the characteristics of renting. Authoritative departments such as the central bank and the Ministry of Housing and Urban-Rural Development have mentioned similar content, which is tantamount to making it clear to us.

Therefore, in the first 11 months of last year, the transaction area of new homes in the country's key 100 cities fell by about 5% year-on-year, and the absolute scale was the lowest level since 2016 in the same period. Converting stock housing into rental housing is a good option.

Sum up:

Again, this work is only a personal conjecture based on official trends and media information, and does not involve any directional suggestions, and is only for objective discussion.

In fact, if someone wants housing prices to fall, there must be people who want to rise, and there is no unified answer at all. If we want to make the property market healthy and stable, the first step may be to de-financialize, and weakening everyone's concept of buying a house may be one of the ways.

From this point of view, at the beginning of 2024, the two major authoritative departments will issue a special document mentioning the development of rental housing, which may be intrinsically linked.

This once again tells us that whether to buy a house in the future or not, remember to be demand-based, and don't have investment ideas, especially if you are a first-time buyer, you must be more cautious.

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