The central media has set the tone for the property market in 2024! The first 15-word question, is it really anxious?

▼ Text|Lao Mo

Do you think the same way, "I thought that housing prices had bottomed out, but who knew that this was just the beginning". As recently as January 17, China Economic Weekly, a media outlet, reported an article titled "Housing prices in 69 cities returned to a year ago, with Nanjing, Xiamen and Zhengzhou and other cities falling first".

To tell you the truth, after reading it, my heart trembled directly. You must know that as of the end of December 2023, the average price of commercial housing in the country is 10,580 yuan / square meter, compared with the peak of 12,469 yuan / square meter in April this year, a drop of 15%.

In terms of cities, according to the National Bureau of Statistics, compared with the whole year of 2023, the number of cities where the average price of new homes has risen has dropped from a maximum of 64 to a minimum of 7. In terms of second-hand housing, 70 large and medium-sized cities across the country were directly "wiped out" in December.

I didn't understand it at first, but then I thought about it carefully, this is a normal situation, after all, the development of the property market in the past is the pursuit of speed, as long as the speed is faster, whether it is housing prices or transaction volume, the higher it will be, so now it is down, it is really not surprising.

And what we should really think about is that 2023 has passed, how will the property market go in 2024?

On January 21, China Real Estate News published an article entitled "How effective is the intensive introduction of real estate support policies?". Just looking at these 15-word headlines, this question is really the first time I have seen it, what happened? Let's look directly at these three points:

First, the reasons for the weakness of the mainland property market were found, mainly including four points.

According to the mainstream view, the reason for the current weakness of the mainland property market is nothing more than the aging of the population, the slowdown in income growth, the oversupply of housing in the country, and the slowdown in the urbanization process. Isn't this the main reason for the rise in housing prices in the mainland in the past?

Now we understand, let's look directly at the data, in the past, the average annual growth rate of urban residents' disposable income exceeded 8%, and now it is only 5%, as long as the money in hand is not enough, and buying a house is not profitable, the transaction volume will definitely fall.

However, we must also understand that weakness does not equal a crash, taking existing homes as an example, as of November 2023, the sales area and amount of existing homes in mainland China have increased by 7.4% and 11.2% respectively, this achievement must be admitted, but we also have to understand that the situation of off-plan houses is really bad, so on the whole, it still looks weak.

Second, the current mainland property market is still facing a lot of downward pressure.

According to data, in 2023, the sales area of commercial housing in mainland China will be 1.17 billion square meters, and the sales volume will be 11.6 trillion yuan, which is not very bad, but compared with the previous data, the situation is completely different, both of which have fallen by more than 5%, so it will lead to inventory pressure or further increase.

In fact, there is another point that we have overlooked, that is, the trend of the land market. As I said before, "If you look at the price of bread, then the price of land is flour", which means that as long as the flour is not easy to sell, it will inevitably affect the price of bread.

According to statistics, after the cancellation of the price limit, except for a few land plots such as Hefei, Jinan and Chengdu, where the premium rate exceeds 30%, the overall premium rate of the land price of most land plots is still low. So in the final analysis, if the land is not easy to sell, let alone the house, there will naturally be downward pressure.

Third, the risks of real estate companies still exist, and we cannot ignore them.

Objectively speaking, in fact, the main risk of the current property market is the source of real estate enterprises, as mentioned in the article, as mentioned in the article, as of the first half of 2023, at least 50% of the listed real estate companies in the mainland have a cash short-term debt ratio of less than 1, what does this mean?

If you want to stabilize the property market, solving the risk of real estate enterprises is an important part, whether it is the essence of ensuring the delivery of real estate or financial support, but to tell the truth, there may be a long way to go in the future.

Speaking of which, it is not difficult to understand why the central bank suggested in the article that about 2 trillion yuan of new bank loans to real estate enterprises in the next 12 months, and also suggested to meet the reasonable capital needs of high-quality real estate enterprises and speed up the approval of development loans. To put it bluntly, it is to continue to increase financial support.

Sum up:

So in the final analysis, in the long run, the property market must have a bottom line, or stability must be the main tone, but in this process, changes are inevitable.

For example, last year, the mainland sold a total of 1.17 billion square meters of commercial housing, compared with the peak of 1.5 billion square meters and 1.6 billion square meters in previous years, this level is significantly lower, and the housing prices are the same. I think this is a normal phenomenon in the transformation of the property market, after all, house prices cannot go up forever.

The reason is simple, if you don't control housing prices, not only will it not help the economy, but it will limit it. Especially in the real economy, even in third-tier cities, the minimum annual rent of shops in high-traffic areas is more than 100,000 yuan, or even more than 200,000 yuan.

In the end, who will be fattened, and who will suffer? Needless to say, prices will definitely continue to rise, so this is not surprising.

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