It has long been said that the adjustment of the property market for more than two years is due to the "three red lines" to deleverage real estate enterprises, not the reason for the decline in the birth population and insufficient income. Therefore, it is necessary to correct the erroneous view that our property market will continue to adjust for many years and that property prices will fall to an extent that people cannot imagine.
At this stage, it cannot be said that all property prices have completed the bottoming, but for most properties, it has actually been bottoming out for a while, and the reason why there has been no obvious rebound is actually waiting for a "conduction". This conduction is actually capital.
The question now is, is there enough money at all? The answer is obviously!
According to central bank data, the money supply M2 was 238.3 trillion at the end of 2021 and 292.3 trillion by the end of 2023, and the 24-month banknote issuance was around 54 trillion.
It stands to reason that such a large amount of capital should be reflected in commodity and asset prices, but as you can see, the price index CPI in 2023 will be -0.3%.
As for the stock market, in fact, there is no need to say more, as can be seen from the index, the Shanghai Composite and the Shenzhen Component Index have hit a new low in the past three years, and individual stocks may be even worse.
Of course, the economy can only be said to be unsatisfactory, with GDP growth of 3% in 2022 and 5.2% in 2023, which is also far lower than the average annual growth rate of more than 10% in the money supply M2. Now many people can't help but ask, where is the other large amount of money going?
From the perspective of industry insiders and our own feelings (there are information about banks asking you to take out loans, and we often receive calls to give you low-interest rate funds), to put it bluntly, a considerable part of the funds are still sleeping in the bank.
And we see that the central bank is still releasing funds, such as the RRR cut on February 5, which has released about 1,000 billion long-term funds. According to the principles of economics, whether it is bank funds or private funds, they need to find an outlet.
Obviously, where the "exports" of these days go, it will inevitably lead to a sharp rise in the prices of related assets. After reading the relationship between the current M2 and the logic of the property market analyzed by an economist of a think tank, many of us may be able to untie the knot in our hearts. Here's what it looks like:
The money supply M2 will increase by 9.7% year-on-year in 2023, and has increased by about 100 trillion in the past four years, which is basically the same as the sum of the new currencies of Lao, the United States and Europe, but M1, which is the demand deposit + cash in circulation of enterprises, has only increased by 1.3% year-on-year, and the "scissors difference" has reached 8.4%, which shows that the willingness of enterprises to invest is getting lower and lower.
From the perspective of economic principles, M2 has always been positively correlated with inflation, and the growth of money supply M2 means that the monetary aggregate of the whole country is rising.
However, during the same period, M2 was as high as the sum of Europe and the United States, but as a result, prices fell, the stock market fell, and of course, housing prices also fell significantly. The direct cause of this situation is that people have weak confidence in future expectations and dare not consume, let alone invest.
At present, some of them are sleeping in the banks, and some of them are being displayed in the form of treasury bonds, local government bonds, and urban investment bonds.
It is indeed difficult to find the industry that undertakes the pouring capital, only real estate.
Judging from the logic of the property market policy in the past two months, it is indeed guiding funds to gather in real estate, and the reason is very simple. Two lines at the same time:
First, first liberalize the demand for housing in second-tier cities, and find that the effect of capital inflow is not obvious, and then let the first-tier cities of Guangzhou and Shanghai to test the qualifications of mobile singles to buy houses. If it is not obvious, then it will definitely be necessary to increase the current, including the north and the deep, and will try to open up on a larger scale.
There is no doubt that if the four first-tier cities increase the relaxation of purchase restrictions, housing prices will definitely rise, because these four cities gather the best quality resources in the country, and the demand for housing is far greater than the supply. Moreover, if the purchase restrictions are fully lifted, there may be a new round of skyrocketing.
Second, the three red lines have made the debt of the top 50 real estate companies nearly 60%, even if the bank passes the extension, but compared with the huge debts that continue to mature, it is not a solution after all. In order to fundamentally resolve the debt crisis and maintain systemic financial security, it is necessary to comprehensively rectify and revise the policies that were too strict in the past.
Therefore, injecting capital into real estate has become the top priority of real estate work at present. According to media statistics, as of the end of January, 170 cities in 26 provinces have applied for the first batch of "white lists", with a total of 3,218 real estate projects. If calculated according to the 330 million yuan of a project in Nanning, Guangxi, which was the first to obtain a development loan, the amount involved in this batch of white lists will also exceed 1 trillion.
Of course, less than a week before the Ministry of Housing and Urban-Rural Development's real estate financing coordination meeting, this is only the first batch of "white list" projects, there are more than 600 cities across the country. If it goes well, the second and third batches should also come. As for the amount involved, it is estimated that I can't count it on my fingers.
In fact, there is another measure that is also trying to "transfuse" the property market. If direct investment in real estate projects is a short-term act, then the three major projects are long-term measures in the new real estate model.
Similar to the "white list" of real estate financing, at the beginning of the year, the first batch of credit for urban transformation has exceeded 800 billion, of which the first batch of loans for urban village transformation in Jinan has reached 94 billion, and there are still declarations. Since it is a long-term measure, in a sense, it is actually similar to the last round of shed reform to remove the inventory of the property market, and the intensity is so great that it is not within the scope of ordinary people's vision.
Taking the transformation of urban villages as an example, at the beginning, it was said that it would be promoted in mega and mega cities, but judging from the successive deployments of the two sessions in various localities, it should not be distinguished.
Moreover, judging from the logic of urban village transformation released by Shenzhen, Guangzhou and other cities, in fact, demolition and relocation are given priority, for example, Guangzhou has lowered the threshold of demolition consent rate from 80% to 2/3, while Shenzhen has expanded the priority demolition scope on the basis of the traditional four types of demolition scope, and the urban interface involved accounts for 40%, which shows the great determination. The impact of demolition on the property market will not be repeated, but let's make up for the market from 2015 to 2018.
Suddenly, I saw a message that a 2003 residential area in the core area of the North Bund in Shanghai's Hongkou District was about to be demolished, with a total height of more than 20 floors and a house that was only 20 years old. In a word, in the face of need, all the rules and regulations are not a thing.
From this, we can see that now a large amount of funds, whether short-term or long-term, eventually began to converge on real estate, how can real estate not rise?