In February 2024, the average transaction price of new homes nationwide fell by 22.6%, and housing prices continued to decline, causing widespread concern in the market.
In order to change the status quo of real estate, the central ministries and commissions issued a paper document to "save the market" through macroeconomic regulation and control.
First, the economic value of the real estate industry is extremely high
On March 22, the Standing Committee of the People's Republic of China pointed out that the real estate industry chain is long, involves a wide range, has a close relationship with the people, and has extremely high economic value.
In 1998, real estate with a value of 343.5 billion yuan accounted for 4% of the country's GDP;
In 2007, the proportion of real estate rose to 5.1%, creating a value of 1.48 trillion yuan;
In 2022, the added value of the entire industry will be 7.38 trillion yuan, accounting for 6.1% of GDP, and if it is combined with the construction industry, it will account for 13%.
In 2023, the share of real estate in the total GDP of the market will fall to 5.8%.
Real estate is not a single existence, its industry involves a wide range of areas, building materials, decoration, furniture and many other fields have to rely on real estate to eat, involving a whole body, the impact is quite profound.
According to experts, there are about 13 million people employed in China's real estate industry, in addition to at least 40 million construction workers who rely on real estate for their livelihood.
Loans related to residents buying houses account for 40% of bank credit, and the tax revenue generated by a single industry can reach 35% of the national treasury and 50% of the local comprehensive financial resources.
Therefore, the macro "bailout" is particularly important, but this road is extremely difficult.
Second, real estate will face great pressure in 2024
Since 2023, the state has carried out real estate regulation and control through the implementation of measures such as guaranteeing the delivery of real estate and reducing mortgage interest rates, although it has maintained the bottom line of the market and achieved a soft landing, but it has achieved little effect.
In 2024, the real estate industry is under increasing pressure.
On the one hand, housing prices continued to fall, with sales area and sales of 1.8 billion square meters and 18 trillion yuan in 2021, falling to "Double 13" in 2022 and "Double 11" in 2023.
The overall market vitality is insufficient.
In 2023, the increase in long- to medium-term market loans in the real estate industry will be the lowest since 2016.
In addition, a declining population and lower demand are also contributing to the downturn in the real estate industry.
According to the National Bureau of Statistics, the national newborn population in 2023 will be 9.02 million, 540,000 fewer than in 2022, and the number of births continues to be lower than the number of deaths.
Even if the market is actively rescued in 2024, the data of the first two months is still unbearable, and the sales volume and sales area are diving.
Third, the "bailout" move has brought a new trend to real estate
1. Start by increasing residents' demand for housing purchases.
Cancel the purchase restriction policy, continue to reduce interest rates and taxes, and reduce the cost of buying a house. In addition, there may be a policy of reducing down payments at the national level.
According to the Notice on Adjusting and Optimizing the Differentiated Housing Credit Policy issued by the central bank on August 31, 2023, the minimum down payment price for residents buying a first home can be reduced to 20% of the house price, and the minimum down payment for a second home can be as low as 30% of the house price.
A low down payment means a low loan, and lower interest rates equate to lower costs, which will effectively increase the demand for home purchases.
In addition, the government and relevant departments will also start by reducing the intermediary fees for the sale and purchase of second-hand houses, reducing the shared costs, and increasing the number of buildings to be opened and delivered, and actively implement relevant policies to support residents to purchase housing, so as to better protect the legitimate rights and interests of residents.
2. The construction of affordable housing has been accelerated in various places, and real estate has entered the "dual-track" era.
On August 25, 2023, the Standing Committee of the People's Republic of China adopted the "Guiding Opinions on Planning and Construction of Affordable Housing", also known as Document No. 14.
The release of the document marks that China's real estate will enter a "dual-track" era, on the one hand, affordable housing targeting the working income group as the customer.
On the one hand, there is a commercial house with commodity attributes for the purpose of improving sexual housing, and the two circles take what they need.
According to the current public data, 2024 will be a critical year for the construction and entry of affordable housing into the market.
At present, during the 14th Five-Year Plan period, Shanghai, Shenzhen, Nanjing and other cities have built more than 1 million square meters of affordable housing, with Shanghai having the most, reaching more than 4 million square meters.
In addition, Beijing, Nanjing, Wenzhou and other cities are also actively supplying affordable housing, with a sales proportion of more than 10%, although it is not as good as Shanghai's 27% and Shenzhen's 17%, but it is also at a high level.
In addition, the so-called affordable housing construction also includes urban village renovation projects, public infrastructure construction of emergency dual-use facilities, as well as shantytown resettlement housing and public rental housing.
Taking into account the purchase and sale of leases, we should take into account the housing needs of different economic levels, and support young people to withdraw housing provident funds for rent.
Generally speaking, the country's vigorous rescue of the market will inevitably bring new trends to the real estate industry, but for home buyers, it is still necessary to maintain a calm, rational and cautious attitude.
Buying a house can easily cost tens of millions, accounting for almost 60% of a family's savings, which is really related to the economic interests of individuals.
Therefore, when making decisions, we need to consider all factors so that the decision does not affect our financial situation and future life.