After "high turnover, high leverage, and high debt" fails, what is the new model of real estate development?

According to CCTV, on January 17, the Information Office of the State Council held a press conference, and Kang Yi, director of the National Bureau of Statistics, said that a new model of real estate development is being actively constructed, which is a fundamental policy to solve the problem of real estate development and promote the healthy development of real estate.

On the same day, the WeChat public account of the Shanghai Municipal Housing Security and Housing Administration, "Fang Keyuan", also released the key tasks of Shanghai's housing and urban-rural construction in 2024, which should adhere to the principle of "housing for living, not speculation", better meet the demand for rigid and improved housing, and implement the construction of "three major projects" such as affordable housing, urban village transformation and "level-emergency dual-use" public infrastructure, so as to promote the smooth transition of real estate to a new development model.

On the 18th, the Henan Provincial Housing and Urban-Rural Construction Work Conference was held, proposing to do a good job in the rectification and annihilation of projects with the problem of ensuring the delivery of buildings and expropriation and resettlement, focusing on tackling tough problems and comprehensive policies, further reducing risks and stabilizing expectations, ensuring people's livelihood and stability, and striving to build a new model of real estate development.

The new model of real estate development was first proposed at the 2021 Central Economic Work Conference, the new development model was mentioned again at the 2022 Central Economic Work Conference, and the new development model was mentioned for the third time at the 2023 Central Economic Work Conference, requiring "improving relevant basic systems and accelerating the construction of a new real estate development model".

The background is that the supply and demand of housing in the mainland real estate market are basically balanced, and there is even a surplus in some places, and it is impossible to continue to maintain high growth, which is conducive to the elimination of backward production capacity, structural optimization, and high-quality development of the real estate industry.

So what is the new model of real estate development? Is it obviously different from the "three highs" model of "high turnover, high leverage, and high debt" in the real estate industry in the past? Let's learn with you today.

According to the report of China Construction News, the National Housing and Urban-Rural Construction Work Conference proposed to build a new model of real estate development, establish a new mechanism for the linkage of "people, housing, land and money", improve the basic system of the whole life cycle of housing from development and construction to maintenance and use, implement the construction of the "three major projects", accelerate the solution of the housing problems of new citizens, young people and migrant workers, make efforts to build good houses, and create a new track in the field of housing and urban-rural construction.

First, the new industry connotation, the contribution of real estate to the macro economy will be upgraded from "development and construction" to "space services".

First, the quality improvement of existing houses. The scale of housing stock in mainland cities and towns is large, and the problems of old buildings and incomplete facilities are prominent, and there is a huge demand for improving the quality of housing stock. According to the data of the seventh national population census, the construction area of the stock housing is about 32.2 billion square meters, and the quality improvement and transformation of the stock housing will become a new connotation and new growth point of the real estate industry;

Second, property management services and life services such as pension and childcare. The property management area in mainland China continues to expand, and the business format has penetrated into multiple scenarios of community and residents' lives. Build a number of complete communities, make up for the shortcomings of facilities such as the elderly and the young, strengthen the construction of barrier-free environments and renovation for the elderly, and create a number of models for the construction of child-friendly spaces. With the continuous increase of residents' income, more consumption and service scenarios such as community pension, community medical care, community education, community childcare, and community finance will promote economic development;

Third, real estate agency services. From January to November last year, the proportion of second-hand housing transactions in the country reached 37.1% of all housing transactions, a record high, and the second-hand housing transactions in seven provinces and municipalities directly under the central government exceeded the transaction volume of newly built commercial housing. The structure of market transactions has changed, the transaction volume of second-hand housing has gradually expanded, and the era of stock housing transactions has arrived.

The second is the new basic system of the industry, which steadily promotes the pilot sales of existing houses, so that the people can buy houses with confidence, and establishes a housing physical examination, pension and insurance system to let the people live with peace of mind.

The pre-sale system is a product of the era of real estate construction, and the current real estate has shifted from "whether there is" to "whether it is good or not", with higher requirements for quality, and the pre-sale system also needs to keep pace with the times.

From the perspective of the whole life cycle of housing, housing pensions, regular physical examinations of houses, and housing quality insurance are also very important. Housing has gradually entered a period of structural optimization and quality improvement, providing full life cycle security for housing, so that people can live comfortably.

The third is to focus on the new industry and actively promote the "three major projects" in super large cities.

The construction of affordable housing is a major reform to improve the housing system and supply system, and to reconstruct the relationship between the market and security. Wage earners such as new citizens and young people working in first- and second-tier cities are eager for housing. Construct affordable housing, so that wage and salary groups can gradually realize home ownership, eliminate the anxiety of not being able to afford commercial housing, and strive for a better life with confidence.

The construction of public infrastructure is an important measure to coordinate development and security and improve urban resilience. For example, B&Bs, hotels, tourism and residential infrastructure, medical emergency service points, suburban large-scale storage bases and other "level-to-emergency conversion" projects can be used in ordinary times and in emergencies, which is of great significance to promoting the high-quality development of cities.

It can not only effectively make up for the shortcomings of large-scale urban emergency support capacity building, but also meet the needs of emergency resettlement, medical services, and material support after earthquakes, floods, fires and other emergencies in "emergency", but also improve the efficiency of urban operation services, give full play to the utility of traditional public infrastructure in "peacetime", and improve the quality of life such as urban tourism and residence.

The transformation of urban villages is an inevitable way to promote a new type of urbanization with people as the core, which can not only improve people's livelihood and well-being, but also make up for the shortcomings of urban construction and development, and take into account the quality and efficiency of development.

To improve the living environment, urban villages generally have outstanding problems such as high public health and safety risks, many housing safety and fire safety hazards, imperfect supporting facilities, and dirty and messy environment.

Expand effective demand: urban villages have a large population and high population density, and four types of effective demand can be expanded after the transformation: investment in resettlement housing for relocated households and sales of newly built commercial housing on vacated plots, consumption of villagers' phased transitional leasing and re-renting of original tenants during the resettlement period, investment in supporting infrastructure construction, and consumption and investment in real estate-related industrial chains;

Optimize the spatial layout, incorporate urban villages into the overall urban development plan through transformation, improve the utilization efficiency of land resources in core areas, promote the intensive development of urban public resources, and build a livable, resilient and smart modern city;

Adjusting the supply and demand structure of the real estate market, the main problem of real estate in the first and second-tier cities in the mainland is the lack of land supply in the core area. (The above content is from China Construction News, author: Xia Lei)

On the whole, one of the cores of the new model of real estate development is the "dual-track system", low-income people have affordable housing to choose from, such as the placement of affordable housing that is being vigorously promoted, middle and high-income people buy commercial housing, a variety of ways to meet housing demand, price limit, purchase limit, loan limit and other policies will be gradually withdrawn, "market + security" parallel.

At the same time, improve the quality of living and living environment, including the upgrading of old houses, but also to build a new era of "good houses", in product development, structural quality, green, health, property services, community configuration, surrounding facilities and other dimensions, to meet the market from "housing to live" to "live in a good house" demand transition, and strengthen the housing from development and construction to maintenance and use of the management mechanism, from the purchase of the house to the occupancy, there are various complete systems to protect the legitimate rights and interests of the owners.

In addition, through urban renewal and supplemented by "large-scale demolition and construction", that is, to improve the living environment, enhance the image of the city, and release the demand for housing purchases, which is conducive to the stable development of the real estate market, and so on.

Finally, after 20 years of sustained and rapid development of the real estate market, along with the changes in the economic environment, population and concept, it is the general trend to enter a new stage.