A few years ago, the shed renovation and demolition once set off a round of "wealth-making" movement. At that time, some urban residents could receive millions, or even tens of millions, of compensation for demolition as long as they encountered shed renovation and demolition. Many people are fortunate enough to encounter demolition, quickly achieve financial freedom, and their fate has changed forever. So much so that many investors bought old houses and gambled on the opportunity to renovate and demolish sheds.
However, due to various reasons, the shed renovation and demolition was stopped by the high-level in 2019. Starting from 2020, the shed reform will gradually withdraw from the historical stage and be replaced by the old reform. The so-called old renovation is to repair and transform the old house on the basis of not demolishing and rebuilding. After the implementation of the old reform, many people lamented that the era of getting rich by demolition and relocation will "never come back".
Recently, the mainland has started a new round of "demolition and relocation waves." According to media reports, in December 2023, the China Development Bank, the Export-Import Bank of China, and the Agricultural Development Bank of China will net increase the collateral supplementary loans (PSL) of 350 billion yuan, which means that a new round of "demolition and relocation" may really come again.
In this regard, some industry insiders pointed out that the PSL, which was set up by the central bank for the purpose of shed renovation and demolition, has now returned again. However, this time is still different from the previous shed renovation and demolition. The new round of "demolition and relocation" in 2024 is set up to start the urban village renovation project. This move will have a profound impact on the current real estate market.
Many people may wonder why a new round of "demolition and relocation" will start again in 2024?
One is that from 2023, the domestic real estate market will continue to be sluggish, not only the sales volume and sales area of commercial housing will decline, but also the housing prices in various places will also show a significant downward trend. The reason why the mainland wants to launch the urban village renovation project is to create a large number of housing demand from relocated households, which can not only stabilize the current housing prices, but also help developers remove the inventory of commercial housing.
The other is to let the Chinese people live in "good houses". The quality of domestic houses has always been worrying. In addition to the poor construction quality of most houses before the housing reform, due to the rapid rise in housing prices in previous years, developers have accelerated the turnover of commercial housing in order to make more money, and the life span of such houses is only 20-30 years at most.
Because of this, the Minister of Housing and Urban-Rural Development once proposed that we should strive to let the people live in better houses. At the same time, Chen Huai, a professor at the Chinese Academy of Social Sciences, also believes that more than half of the houses in China's existing housing system will be demolished in the next 10-20 years. Then, the next step is to demolish the old houses that are not of good quality, and to build more high-quality new houses.
Now the question is, when a new round of "demolition and relocation" arrives in 2024, which houses will be demolished? There are four main categories: First, old and dilapidated houses. It is the appraisal of the old house by the relevant agency, and if the appraisal is carried out, the structure of the house has been damaged, and the house cannot be repaired even if it is renovated. Old and dilapidated houses like this are definitely going to be demolished.
The second category is houses on municipal planning land. Many large cities now have new land acquisition plans every year. The main reason is to use the acquired land for the construction of subway hub stations, road widening, theme parks, etc., and the houses on these municipal planning sites will definitely be demolished.
The third category is houses in the core area of the city. Some developers will look at the core plots of land in large cities and want to use this land for the construction of large business districts, mid-to-high-end residential areas, and office buildings, etc., and houses like this will also face demolition. However, this situation is becoming less and less now, mainly because the cost of acquiring land is too high, and now developers will not be too rich in hand.
The fourth category is houses that do not meet the safety requirements of the new era. In the past, people only needed a house to live in, but now they can't. Like some old houses, although the structure of the house has not been damaged, people can continue to live there. However, it cannot withstand the impact of disasters such as earthquakes and floods. Old houses like this will also be included in the scope of demolition.