Text: Ren Zeping's team
Guide
Real estate is the first pillar industry of the national economy, which is related to economic recovery, people's livelihood and employment and financial risks. The mainland is currently in a critical stage of the transformation of old and new kinetic energy, and if the real estate is stable, the economy will be stable, the employment will be stable, and the financial sector will be stable. At present, the relationship between supply and demand in the real estate market has undergone major changes, what is the future situation?
We have made the top 10 predictions for real estate in China:
1. The era of large-scale real estate development has come to an end, and the dominant era of stock housing has begun, and the long-term inflection point of the population of the main home buyers aged 20-50 has appeared. "Real estate looks at population in the long term, land in the medium term, and finance in the short term."
2. Land finance is facing transformation, land finance accounts for 30% of local financial resources, and the local debt problem is prominent, which needs to be resolved urgently, and promote the transformation to tax finance and equity finance.
3. The real estate market is facing adjustment and differentiation, which is to digest the previous high housing prices, high inventory and high leverage, and the differentiation is that the market of population inflow and outflow of cities will be significantly differentiated.
4. Population migration to urban agglomerations in metropolitan areas, the population of northeast, northwest, and low-energy cities is facing continuous outflow pressure, and the United States, Japan, South Korea, etc. will have the phenomenon and law of population agglomeration in the second half of urbanization.
5. Whether the real estate market can land softly will greatly affect whether China's economic growth can be smoothly shifted, which is related to the employment of tens of millions of people, dozens of upstream and downstream industrial chains, and the security of financial credit, which accounts for nearly a quarter, and is very critical in the next 2-3 years. It is not to be oversumed that global economic history shows that real estate is the mother of cycles, with nine out of ten crises.
6. Relaxation of restrictive measures such as purchase restrictions, loan restrictions, and price limits is the general trend, which are the tightening measures introduced during the previous overheating period of the real estate market, the situation has changed, and the real estate market has shifted from preventing overheating to preventing overcooling, and the restrictive measures should be removed to promote a soft landing in the real estate market. Consideration can be given to continuing to cut interest rates sharply and forming a housing bank to buy developers' inventory for affordable housing, and the top priority is to restore market confidence.
7. The reshuffle of the real estate industry is the trend of the times, most of the real estate companies will disappear or be merged and reorganized, and increase efforts to support the restructuring of high-quality real estate enterprises in the industry, survival of the fittest, which is inevitable for all industries to develop to a mature stage.
8. Real estate sales and investment will gradually slow down, and it is expected to bottom out in the next two years or so, and the main support for the future housing market will come from improved demand, urban renewal, and affordable housing demand.
9. The three major projects are the main support for real estate investment in 2024, and the funds mainly come from the central government.
10. The strategy of urban agglomeration, the linkage between people and land, financial stability, and the simultaneous development of rental and purchase are the fundamental policies to achieve the balanced and healthy development of supply and demand in the real estate market, change cognition, and conform to economic laws.
directory
1 Prediction 1: The era of large-scale real estate development has come to an end and the era of stock has entered 2 Prediction 2: The transformation of land finance to tax finance and equity finance 3 Prediction 3: The real estate market is facing adjustment and differentiation 4 Prediction 4: The population will concentrate in metropolitan areas and cities5 Prediction 5: The soft landing of real estate is related to the smooth shift of China's economy 6 Prediction 6: Relaxation of restrictive measures such as purchase restrictions, loan restrictions, and price limits is the future trend 7 Prediction 7: The reshuffle of the real estate industry is the general trend 8 Prediction 8: Real estate sales and investment bottoming out are imminent9 Prediction 9: The three major projects will be the main support for real estate investment in 202410 Prediction 10: Urban agglomeration strategy, people-land linkage, financial stability, and simultaneous rental and purchase
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1 Prediction 1: The era of large-scale real estate development has come to an end and the era of stock has begun
The era of large-scale real estate development has come to an end, and the era of stock housing dominance has begun. At present, the long-term inflection point of the population of the main home buyers aged 20-50 has appeared, with an urbanization rate of 66% and a household ratio of more than 1.09. "Real estate looks at population in the long term, land in the medium term, and finance in the short term."
From the perspective of demand, in terms of population, the size of China's 20-50-year-old main home buyer reached a peak in 2013. At the end of 2023, the urbanization rate of the permanent resident population reached 66.16%, and the urban permanent population increased by 11.96 million over the end of the previous year. International experience shows that urbanization is about an "S-shaped" curve that has been flattened slightly, and China is currently at the end of a period of rapid development (30%-70%). According to our projections, China's urbanization rate will reach about 78.6% by 2040, corresponding to an urban population of 1.05 billion, an increase of about 150 million people from 2020.
From the perspective of supply, the number of urban housing units in China increased from about 31 million to 360 million from 1978 to 2022, and the household ratio increased from 0.8 to 1.09. Compared with 1.17 and 1.16 in the United States and Japan, and 1.03 and 1.02 in Germany and the United Kingdom, domestic housing has gone from a shortage of housing to an overall balance.
Overall, China's population aged 20-50 peaked in 2013, the peak demand has passed, the ratio of housing to households to households is nearly 1.1, and the construction of a new real estate development model is accelerating, marking the farewell to the high-growth stage of China's real estate market.
2 Prediction 2: Transition from land finance to tax finance and equity finance
Land finance is facing transformation, land finance accounts for 30% of local financial resources, and the local debt problem is prominent, which needs to be resolved urgently, and promote the transformation to tax finance and equity finance.
In the design of the land finance system, local governments rely on land finance, and the direct tax revenue of real estate and the income from land transfer contribute considerably. In 2022, land transfer income and real estate special tax will account for 26.0% of local fiscal revenue, and land price will account for about 5% of housing prices. In the past two years, affected by the economic downturn, the land finance space of local governments has continued to shrink, and the income from the transfer of state-owned land use rights in 2023 will be 5.8 trillion yuan, falling below the 6 trillion mark, a year-on-year decrease of 13.2%, and 2.9 trillion yuan less than the high point of 8.7 trillion yuan in 2021.
From a macro perspective, in 2022, the total revenue of local governments and real estate-related will be 8.6 trillion yuan, of which the income from China's land transfer will be 6.7 trillion yuan, and the total tax revenue of the five real estate-specific taxes will be 1.9 trillion yuan. From 2012 to 2019, the total share of land transfer revenue and real estate special tax in local fiscal revenue increased from 27.1% to 35.6%, and then decreased to 26.0% in 2022. In 2022, land transfer income and real estate special tax accounted for 63.4% of commercial housing sales.
From the perspective of meso-cities, 11 cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou and Tianjin, were selected for housing price composition accounting. In 2022, land costs accounted for 49.0% of house prices, tax costs accounted for 14.4%, construction and installation expenses accounted for 19.5%, gross income of enterprises was 7.0%, and land costs plus tax costs accounted for about 5% of house prices. After regressing the growth rate of housing prices from 2014 to 2022, it is found that for every percentage point increase in land prices, housing prices increase by 0.2 percentage points, and the increase in land costs has a strong explanatory power for the increase in housing prices.
On March 5, 2024, the "Government Work Report" deployed the key work for 2024, mentioning "coordinating the resolution and stable development of local debt risks, further implementing a package of debt plans, properly resolving existing debt risks, and strictly preventing new debt risks", and "planning a new round of fiscal and taxation system reform". To resolve the hidden debts of local governments, it is necessary to deepen reforms and properly handle the relationship between the central and local governments, the government and the market, and the government and finance.
Fiscal and taxation reform is an inevitable choice in the medium and long term, and it is necessary to promote the transformation of land finance to tax finance and equity finance. In the long run, on the one hand, we will promote the transformation of land finance, strengthen the development of new infrastructure, new energy and other industrial construction, and cultivate local industrial highlands; on the other hand, from land finance to equity finance, some local governments have advanced consciousness to get rid of the dependence on real estate and build local characteristic industrial clusters. For example, Anhui has accelerated the construction of emerging industries represented by information technology, new energy and new materials, and Changzhou has built a "new energy capital" to incubate enterprises and broaden financial revenue channels through equity investment.
3 Prediction 3: The real estate market is facing adjustment and differentiation
The real estate market is facing adjustment and differentiation, which is to digest the previous high housing prices, high inventory and high leverage, and the differentiation is that the market of population inflow and outflow of cities will be significantly differentiated
The current situation of the real estate market in mainland China needs to be adjusted urgently: the separation of people and land, and the mismatch between supply and demand have led to high housing prices in the first and second tiers, high inventories in the third and fourth tiers, and the high leverage and high turnover model of real estate enterprises before the "three red lines" is prominent. The separation of man and land is mainly due to the long-term tendency of China's urbanization strategy to "control the scale of large cities and actively develop small and medium-sized cities", which deviates from the trend of population migration. From 2010 to 2020, the urban population of cities with more than 10 million people increased by 25.4%, but the land supply increased by only 2.6%, while the urban population with less than 200,000 people increased by 22.8% and the land supply increased by 47.8%. In terms of real estate companies, compared with international mature real estate companies, the leverage ratio of Chinese real estate enterprises is generally high. At the end of 2022, the asset-liability ratio of China's real estate industry reached 79.1%, a slight decrease from 80.7% in 2020, but still at a high level, and the average asset-liability ratio of U.S. real estate companies was 39.1%, which was at a low level.
In recent years, the Central Economic Work Conference has emphasized that the real estate industry should explore new development models. In the development path to a mature real estate market, the future real estate transformation of the mainland will focus on the following aspects: 1) establish a new mechanism for the linkage of "people, housing, land and money"; 2) improve the basic system of the whole life cycle of housing from development and construction to maintenance and use; 3) implement the construction of "three major projects" such as affordable housing, urban village transformation and "level-emergency dual-use" public infrastructure; 4) accelerate the solution of new citizens, young people, 5) Explore the new connotation of the real estate industry, explore the "light and heavy" model of "development and construction + space service" of real estate enterprises, and build a new track in the field of housing and urban-rural construction.
4 Prediction 4: Population agglomeration in metropolitan areas
The population migrates to the urban agglomeration of the metropolitan area, and the population of the northeast, northwest, and low-energy cities is facing continuous outflow pressure, and the United States, Japan, and South Korea will have the phenomenon and law of population agglomeration in the second half of urbanization.
From the perspective of international experience, population migration can be divided into two stages: from rural to urban migration, to obvious migration to metropolitan urban agglomerations in the middle and late stages of urbanization. From an international point of view, the population migration of the United States presents two characteristics: first, at the regional level, it has shifted from agglomeration to the eight rusty states dominated by traditional industries, to the West Coast and South Coast, which are dominated by energy, modern manufacturing and modern service industries. Second, at the urban-rural level, the population is obviously concentrated in metropolitan areas in the middle and late stages of urbanization. Japan's population continued to concentrate in metropolitan areas along with industry, but around 1973, it shifted from the "three poles" of Tokyo, Osaka, and Nagoya to the "one pole" of Tokyo. (Please refer to the "Zeping Macro" in-depth report "New Trends of Chinese Migration", "Six Imbalances and Countermeasures of China's Real Estate Market", and "China's Urban Talent Attraction Ranking 2023")
The overall trend of population flow in mainland China is as follows: the population is further concentrated in economically developed regions and cities in metropolitan areas, and the differentiation is increasing, with the first- and second-tier population continuing to flow in but slowing down, and the third- and fourth-tier cities continuing to have a net outflow. At the metropolitan level, the population is concentrated in the metropolitan area, but the differentiation is increasing. At the level of urban agglomerations, the population is further concentrated in core cities. It is estimated that about 80% of China's new urban population will be distributed in 19 urban agglomerations, of which about 60% will be distributed in the Yangtze River Delta and Pearl River Delta and other seven major urban agglomerations.
At the regional level, from 2010 to 2020, the proportion of population in the eastern part of the country increased by 2.15 percentage points, decreased by 0.79 percentage points in the central region, increased by 0.22 percentage points in the western region, and decreased by 1.20 percentage points in the northeast. In 2020, the population of the eastern, central, western and northeastern regions accounted for 39.93%, 25.83%, 27.12% and 6.98% respectively.
At the provincial level, the six provinces with shrinking populations are all located in the north, and people go with the industry and people go to higher places. In 2020, the population of Guangdong and Shandong provinces exceeded 100 million, with 126 million and 102 million respectively, accounting for 16.1% of the country. Nine provinces, including Henan, Jiangsu, and Sichuan, have a population of 50 million to 100 million, while 17 provinces, including Yunnan, Jiangxi, Liaoning, Fujian, and Shaanxi, have a population of 10 million to 50 million, and Ningxia, Qinghai, and Tibet have less than 10 million. In the past 10 years, the population of six provinces, including Gansu, Inner Mongolia, Shanxi, Liaoning, Jilin and Heilongjiang, has shrunk, with a decrease of 555,000, 657,000, 796,000, 1.155 million, 3.379 million and 6.464 million respectively. (Please refer to the "Zeping Macro" in-depth report "New Trends of Chinese Migration", etc.)
5 Prediction 5: A soft landing for real estate is related to the smooth shift of China's economy
Whether the real estate market can have a soft landing will greatly affect whether China's economic growth can be smoothly shifted, which is related to the employment of tens of millions of people, dozens of upstream and downstream industrial chains, and the security of financial credit, which accounts for nearly a quarter, and is very critical in the next 2-3 years. It is not to be oversumed that global economic history shows that real estate is the mother of cycles, with nine out of ten crises.
The real estate industry solves a large number of jobs in the real economy of the mainland. Although the real estate industry has faced major adjustments in the past two years, the number of property practitioners has grown against the trend, and it is estimated that the number of real estate employees in mainland China will reach 13 million by 2023, a threefold increase compared with 2004. From 2004 to 2018, the number of employees in the mainland real estate industry increased from 3.96 million to 12.64 million, and it is estimated that the number of real estate employees in the mainland will reach 13 million by 2023. Historically, the rapid development of the real estate industry in mainland China has provided a large number of employment opportunities for the society. According to the latest fourth national economic census in mainland China, in 2018, 50%, 29%, 13% and 6% of the employees in the real estate industry, including property management, real estate development and operation, real estate intermediary services and real estate leasing operations, respectively. We expect that in 2023, the above proportions of real estate practitioners will be adjusted to 65%, 17%, 11%, and 6%.
Real estate drives the output value of dozens of upstream and downstream industrial chains, and real estate directly drives the manufacturing sectors such as building materials, furniture, and wholesale related to housing through investment and consumption, and also significantly drives the tertiary industries such as finance and business services. According to the latest 2020 input-output table of the National Bureau of Statistics, we estimate that the real estate industry in a broad sense will fully drive the GDP of the upstream and downstream industrial chains by 10.0 trillion yuan, and directly drive the GDP of the upstream and downstream industrial chains by 2.4 trillion yuan. In terms of industries, the added value of GDP driven by the broad real estate industry in monetary and financial, retail, steel rolling, and gypsum cement ranked first, with 810.7 billion yuan, 423 billion yuan, 352.7 billion yuan, and 282 billion yuan respectively. Ceramic products, bricks and tiles and other building materials, gypsum and cement are completely driven by real estate, accounting for the highest proportion of the industry's total GDP, at 51.2%, 50.9% and 47.1%.
In December 2023, the credit balance of real estate banks reached 53 trillion yuan, accounting for 22.2% of the total. It is characterized by a huge volume, a peak in proportion, and a slowdown in growth. The occupation of bank credit by real estate is reflected in public real estate loans and personal housing mortgage loans. Overall, as of December 2023, the balance of real estate occupancy of bank credit reached 52.6 trillion yuan, accounting for 22.2% of bank loans, a decrease of 6.7 percentage points from the peak in 2019. In terms of structure, loans for public real estate development were 1.44 billion yuan and personal housing loans were 3.81 billion yuan, accounting for the proportion of bank loans peaking in 2018 and 2020 respectively, and with the introduction of the "three red lines" and "two concentrations of loans" policies, they will fall to 6.1% and 16.1% respectively in December 2023.
6 Prediction 6: The relaxation of restrictive measures such as purchase restrictions, loan restrictions, and price limits is the future trend
Relaxation of purchase restrictions, loan restrictions, price limits and other restrictive measures is the general trend, these are the previous real estate market overheating period of the introduction of tightening measures, the situation has changed, the real estate market from the prevention of overheating to prevent overcooling, should speed up the cancellation of restrictive measures, to promote the soft landing of the real estate market.
In the context of major changes in the relationship between supply and demand in the mainland real estate market, the introduction of property market optimization policies in core cities is very important for stabilizing the property market and the economy. At present, real estate has entered the stage of shifting from "anti-overheating" to "anti-overcooling". From the sales, investment and other indicators of the real estate market has been overshooted, the future urbanization, improvement, urban renewal and so on still have a lot of space, the focus is to promote a soft landing, the launch of a new model, as the mother of the cycle, real estate stability is economic stability.
At present, the property market is weak, and there is no need to worry about the rapid overheating of the market caused by the lifting of purchase restrictions. We can take the opportunity to completely cancel the purchase restrictions, reduce the interest rate of the existing housing loans, and release the reasonable housing demand. 1) Now that the market is sluggish, it is a good opportunity to lift the purchase restrictions. Developed countries do not have purchase restrictions for domestic residents, and they are all regulated by prices and taxes, rather than artificial administrative means. If the first- and second-tier markets are active, the release of reasonable rigid demand and rigid demand can promote the recovery of the industry. In addition, economic growth will be stimulated by contributing more land finance, taxes and fees. The complete abolition of purchase restrictions, in line with the trend of population inflow into urban agglomerations in metropolitan areas, and the linkage between people and land on the ground can alleviate the historical problems of high housing prices in the first and second tiers and high inventory in the third and fourth tiers. 2) Significantly reduce the interest rate of existing housing loans, including residents and real estate enterprises, and the monetary policy department supports banks to reduce debt costs through targeted RRR cuts. Now the interest rate is too high, the pressure on employment and income is high, the residents can't carry it, and the real estate companies can't carry it, so the stock interest rate should be greatly reduced.
7 Prediction 7: The reshuffle of the real estate industry is the general trend
The reshuffle of the real estate industry is the general trend, most of the real estate companies will disappear or be merged and reorganized, and increase efforts to support high-quality real estate enterprises to restructure the industry, survival of the fittest, which is inevitable for all industries to develop to a mature stage.
In March 2024, at the press conference of the second session of the 14th National People's Congress, the Ministry of Housing and Urban-Rural Development stated that "for real estate enterprises that are seriously insolvent and have lost their ability to operate, they should follow the principles of rule of law and marketization, and the bankruptcy of bankruptcy and reorganization of should be reorganized." In November 2022, the Dealers Association proposed the "second arrow" to continue to promote and expand the bond financing support tools for private enterprises;
Since the upward cycle of real estate in 2015, the industry concentration has continued to increase by 2020, with the market share of the top 10, 30, 50 and 100 real estate enterprises in 2020 reaching 28.0%, 49.2%, 61.4% and 75.1% respectively. After 2021, some leading private real estate companies defaulted on their debts and extended their deadlines, and the risk-taking real estate companies gradually faded out of the top 100 list. The concentration of private real estate enterprises has declined, entering the stage of reshuffle, and the market share of the leading central state-owned enterprises has increased. In addition, improving real estate enterprises follow the trend of market demand and increase market share with high-quality products and services. As the Minister of Housing and Urban-Rural Development pointed out at the press conference of the Second Session of the 14th National People's Congress, "under the new model, the current real estate enterprises should see that in the future, they will fight for high quality, new technology, and good service." Whoever can seize the opportunity, transform and develop, who can build good houses and provide good services for the masses, who can have a market, who can have development, and who can have a future. ”
Intensify efforts to support the restructuring of high-quality real estate enterprises in the industry, clear risks, and survive the fittest, which will help maintain the long-term stable and healthy development of the housing market. In the medium to long term, market investors can be marginally optimistic about the future prospects of China's economy. In February 2023, the People's Bank of China (PBOC) released the Report on the Implementation of China's Monetary Policy for the Fourth Quarter of 2022, pointing out that it will meet the reasonable financing needs of the industry, promote industry restructuring and mergers and acquisitions, and improve the asset and liability situation of high-quality leading real estate enterprises. Credit enhancement, extension, loan renewal and other tools ensure the cash flow of the three good students, rather than the insolvency of the non-three good students. The landed real estate enterprises reorganized the entire industry, harvested 15 percentage points of future urbanization, and the remainder was king, and the real estate companies that did not go ashore were reorganized and withdrew from the historical stage. The big reshuffle, the big clearing, and the big differentiation, similar to the steel and coal after the previous supply-side reform.
8 Prediction 8: Real estate sales and investment will gradually slow down and are expected to bottom out in the next two years or so, and the main support for the future housing market will come from improved demand, urban renewal, and affordable housing demand.
Comprehensively consider multiple dimensions, such as changes in macroeconomic policies, real estate enterprises and residents' confidence restoration, etc. We expect that under the neutral scenario, the overall supply and demand will still narrow slightly in both directions in 2024, and the bottoming will be completed in about 2 years. In 2024, the sales area of commercial housing will be -5.3% year-on-year, and the absolute scale of sales will be about 1.06 billion square meters, and the amount of development investment in 2024 will be restricted by the progress of sales and financing recovery, and is expected to be -4.5% year-on-year, with a scale of about 11.0 trillion yuan.
Under the neutral scenario, we believe that in the future, the economic policy will show a slight increase and slow relaxation, the interest rate cut in 2024 will be similar to that in 2023, the central government will maintain the same deficit rate level, the economy will maintain the current prosperity level in 2024, and residents' income will gradually stabilize. In the real estate sector, the demand-side control policies continued to be loose, residents' willingness to buy homes was restored, and real estate prices are expected to improve slightly. The market is recovering in a divergent way. On the supply side, policies to bail out the financing of real estate enterprises, such as the financing "white list" and "three not less than", have been implemented one after another. The reasonable financing needs of real estate enterprises with different ownership systems have been basically satisfied, the disposal of suspended projects in some cities has been alleviated, the confidence of high-quality real estate enterprises has been restored, and the land acquisition of land by three good students has returned to a positive trend.
For six consecutive years, we have followed up on the China Housing Stock Report series and found that taking into account the urbanization process, improvement demand, urban renewal, etc., China's real estate market will decline in demand in the future, but there is still room for development in the medium to long term. According to our estimates, the average annual new urban residential demand from 2024 to 2030 will be about 1.00 billion square meters, which is a certain decrease from the average annual new urban residential demand of 1.13 billion square meters from 2011 to 2023, and the total residential demand in mainland China may drop to 910 million square meters in 2030. In 2024, the annual new urban housing demand in mainland China will be about 1.06 billion square meters, and the increase in urban permanent population (excluding changes in administrative divisions, the same below), the improvement of living conditions, and the demand for urban renewal will account for 28.8%, 34.5%, and 36.7% of the total demand, respectively. In the next six years, the total amount and proportion of improvement demand will show a year-on-year growth trend, and it is expected to surpass the demand brought by the growth of urban permanent population from 2023 onwards.
9 Prediction 9: The three major projects will be the main support for real estate investment in 2024
The "three major projects" are the main support for real estate investment in 2024, and the funds mainly come from the central government, which can consider setting up a housing bank to acquire the developer's inventory for affordable housing, and the developer will give priority to the delivery of the building after obtaining the funds, which will help prevent unfinished, waste of land resources and resolve financial risks.
The construction of the "three major projects" is poised to support real estate investment and promote stability. The construction of the three major projects, including affordable housing, urban village transformation, and "level-emergency dual-use" public infrastructure, will further support market demand and investment in 2024. Among them, the future of affordable housing as one of the "dual tracks" parallel to commercial housing, whether it is a new construction or the acquisition of stock housing as an affordable use, it is good news for real estate enterprises. In conjunction with the "urban village transformation", the resettlement of housing tickets can expand the existing housing business format and increase the business space for housing construction and subsequent property management. The construction of "level-emergency dual-use" infrastructure has also increased the demand for a large number of public construction and urban space services. With the support of PSL's new landing, special bonds, commercial bank matching funds and other channels, the physical workload of the "three major projects" is expected to increase in 2024, supporting market demand and investment start.
Establish a housing bank, which can purchase developers' land and commercial housing inventory at a suitable price through special funds, which can be used for rental housing and affordable housing, improve people's livelihood, save housing enterprises, and alleviate financial pressure. Since the second half of 2021, the capital chain of real estate enterprises has improved slowly. At the same time, the delivery of the building is the top priority, the establishment of a housing bank, after the developer gets the special funds, the limit must be carried out to ensure the delivery of the building, so as to prevent the unfinished, resolutely not let the buyer bear the risk of real estate adjustment. The current practice is to let local governments ensure the delivery of buildings, but local governments are limited by financial pressures and their capacity may be relatively thin. If the collection of real estate enterprises rebounds, the investment of real estate enterprises to acquire land will resume, and the land finance will also recover, and the pressure on local debt will be alleviated. The acquisition of inventory commercial housing and land for rental housing and affordable housing, will help improve people's livelihood, if the additional land for rental housing will lead to a certain degree of waste, killing multiple birds with one stone.
10 Prediction 10: The strategy of urban agglomeration, the linkage between people and land, financial stability, and the strategy of urban agglomeration with simultaneous rental and purchase, the strategy of linking people and land, financial stability, and simultaneous rental and purchase are the fundamental strategies to achieve the balanced and healthy development of supply and demand in the real estate market, change cognition, and conform to economic laws.
We propose an industry analysis framework: "real estate looks at population in the long term, land in the medium term, and finance in the short term". If a combination of long-term and short-term measures is adopted, it is expected to promote a soft landing for real estate and avoid a hard landing, contributing to China's economic recovery and employment.
Based on our research on the housing system and real estate market in developed economies, combined with the current situation and development stage characteristics of China's housing system, it is recommended to accelerate the construction of a new real estate model with the urban agglomeration strategy, people-land linkage, financial stability, real estate tax, and simultaneous rental and purchase as the core.
1) Promote the strategy of urban agglomeration in metropolitan areas. People go with the industry, and people go to higher places. The report of the 20th National Congress of the Communist Party of China pointed out that the strategy of regional coordinated development, major regional strategies, main functional areas and new urbanization strategies should be implemented in depth.
2) Reform the "man-land linkage" with the increase of permanent population as the core to optimize land supply. Promote the linkage between the new permanent population and land supply, the balance of inter-provincial cultivated land occupation and compensation and the increase and decrease of urban and rural land, and strictly implement the principle of "linking the inventory destocking cycle with land supply" to optimize the current land supply model.
3) Maintain long-term stability of monetary policy and real estate financial policy. Stabilize home buyers' expectations and support rigid and improved housing demand. Standardize the financing use of real estate enterprises, support the reasonable financing needs of real estate enterprises, and provide a certain time window for real estate enterprises with problems to have a chance to save themselves.
4) Steadily promote the pilot of real estate tax. Real estate tax substitution of land finance is the general trend, and it is necessary to establish a scientific economic model to evaluate the impact of real estate tax on all parties in the future. At present, the economy is in the bottoming period, and the real estate has not yet come out of the predicament, and the conditions for the collection of real estate tax are not met.
5) The report of the 20th National Congress of the Communist Party of China emphasized that "accelerate the establishment of a housing system with multi-subject supply, multi-channel security, and simultaneous rental and purchase". Enriching the supply forms of commercial housing, rental housing, co-ownership housing and other categories, and forming a multi-party supply pattern of the government, developers, leasing intermediaries, long-term rental companies, etc., can accelerate the solution of housing difficulties for new citizens and young people, and promote real estate enterprises to find new growth space in the leasing business.
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