Individuals can buy land and build houses! This is a big move beyond imagination

Glacier think tank

2024-04-29 12:59Posted on the official account of Zhejiang Glacier Think Tank

If we admit that housing is a commodity, then how can customers like a product that does not have any personality characteristics in an era when the supply of goods tends to be saturated?

Written by丨Ren Dagang

The recent real estate policy in Lishui, Zhejiang Province, may be more practical than the relaxation of purchase restrictions in many cities.

According to the policy, it will "appropriately relax the floor area ratio limit, allow the construction of a single low-rise residential building in accordance with relevant circumstances, and use a physical fence of no more than 2 meters in height for the non-street-level part of the low-rise building".

In line with this policy, Lishui's Bihu New Town 16 acres of low-density land was unveiled, with a plot ratio as low as 0.7, and the plot formed 3 sub-plots through the roads in the area, one of which can be further split into 800-1000 square meters of small plots, allowing a single owner to take the land, and also allowing multiple people to form a group to jointly acquire the land for joint construction.

From house design to interior decoration, from smart home to garden landscape, everything can be "privately customized".

01

At present, it is still inseparable from the real estate industry

Lishui's intention to launch such a policy to boost the real estate industry is more obvious.

First, Lishui's general public budget revenue in 2022 will be 17.086 billion yuan, and in 2023 it will be 18.606 billion yuan, while the expenditure in these two years will be around 70 billion yuan. The bulk of fiscal expenditure needs to be solved by transfer payments. The use of transfer payment funds is more rigid.

There is greater flexibility in the use of income such as land transfer fees, but Yeosu's financial situation has been seriously affected by the reduction of land transfer fees. In 2022, the budget revenue of government funds at the same level in Lishui City will be 8.412 billion yuan, 49.0% of the adjusted budget will be completed, a decrease of 53.1%, mainly due to the decline in land transfer income.

In 2023, the budget revenue of the municipal government fund is expected to be 17.556 billion yuan, an increase of 108.7%, and the actual revenue will be 11.746 billion yuan. For the shortfall, the land transfer fee should account for the lion's share.

Second, in the past many years, the real estate industry can be said to be the "cow" of local finance, and there are not a few places that have a fiscal dependence on the real estate industry of more than 50%. In the past two or three years, the real estate industry has shrunk sharply, and many places have introduced relaxation policies, but the results are not obvious.

Before finding other sources of income that can be "replaced", how to restart the real estate industry and keep this "cow" is not only path dependent, but also a last resort.

Third, despite the sluggish real estate industry, it is still a pillar industry from the national point of view, from the perspective of Lishui, the real estate development investment in 2023 will be 32.38 billion yuan, and the sales output value of industrial enterprises in Lishui is 218.41 billion yuan.

The real estate industry, despite its many problems, remains an integral part of the national economy. The real estate industry is still important, but the traditional way of development can hardly bear its importance and needs to change.

02

"Breaking it down" may be the trend of the future

The traditional way of real estate development is usually that the real estate development company pays the land transfer fee to the local government, auctions off a piece of land ranging from tens of acres to thousands of acres, and then recruits the construction company to complete the construction of the house, and the sales proceeds minus the land transfer fee and other various taxes and fees, as well as construction costs, marketing costs, etc., and the rest is the profit of the real estate development company.

At present, many real estate development companies have encountered financing difficulties, resulting in construction companies not daring to take over easily, or being owed by developers, and terminal real estate sales are also due to market saturation and the expectation of rising real estate prices, resulting in difficult sales, rising capital occupation costs, and increasing difficulty in recovering funds. The traditional real estate development model has encountered unprecedented difficulties.

It should be noted that the market demand for real estate is not absent, but has changed.

Looking back at history, if the first half of the real estate market is to solve the problem of "whether there is a house" to live in, then the second half will solve the problem of "whether the housing is good or not" and "comfortable or not". "Whether there is or not" can be said with data and has its objectivity, but "whether it is good or not" and "whether it is comfortable or not" are purely subjective and personal feelings.

The first half of the real estate policy emphasized the development of patches, which not only saved infrastructure costs, but also allowed the most houses to be placed on the least amount of land and accommodate as many people as possible. So the most convenient way is to hand it over to the real estate development companies with strong financial strength, and they all think of apartment houses. There are only apartments that can meet these requirements at the same time.

This policy really solves the problem of "whether there is a house" or not.

However, in the era of solving the problem of "whether there is any", the new residential buildings in large, medium and small cities in Chinese mainland have left an embarrassing fact, that is, almost the whole country uses a real estate design drawing - try to ask, what is the essential difference between the type and appearance of residential communities in first-tier cities and sixth-tier cities?

Public buildings in Chinese mainland may show some personality, and each city barely has one or two landmarks that can be named, but China's contemporary civil architecture, especially residences, hardly shows any personality characteristics, without any aesthetic pleasure and aesthetic value, which is extremely rare in the world.

If we admit that housing is a commodity, then how can customers like a product that does not have any personality characteristics in an era when the supply of goods tends to be saturated?

China's real estate policy needs to be adjusted. It's not just the purchase policy that needs to be adjusted – all localities have already begun to adjust, and from the beginning of the upstream land transfer, it needs to be fully adjusted.

Yeosu has already divided the plot to a minimum of 800 square meters, so individuals can design and build independently, so why can't it be further reduced to an area like Japan's "one-family construction"?

03

The period of economic adjustment is also a window period for reform

The family structure in Chinese mainland is gradually transitioning from a relatively stable and typical family of three to a single family, a Dink family, a small family of three in the future, or a medium and large family of four, a family of five or six, or even a family of N.

In the face of such a diverse family structure, it will be difficult to meet such changes in the current mainstream two-bedroom and three-bedroom villas, as well as a small number of four-bedroom villas and even fewer villas.

Not only that, but other drawbacks have emerged in the construction of super-large-scale apartments that have been carried out over the past 20 years.

For example, in the early stage of apartment construction, there was no elevator in multi-storey houses, which brought endless trouble to the elderly society, and now many cities are installing elevators in old buildings, causing many disputes and contradictions.

For example, twenty or thirty years after the completion of some residential communities, problems such as aging elevators, leaking walls, and broken public pipes have erupted. There is a high probability that they will encounter a bottoming out of the property maintenance fund, and how to renew these facilities will be quite a troublesome matter - how to raise funds? How to unify opinions? Which problem can be easily solved?

In addition, it is an objective fact that there is a wealthy class with strong spending power in China, and it cannot be ruled out that one of the reasons why some of them buy overseas real estate is that they cannot find the property they like in China. Why not try to keep their spending power at home?

Moreover, if Chinese mainland can provide high-end consumption properties, coupled with enough livability and business, to attract overseas wealthy people to buy property in China, why not expect?

In the face of weak apartment consumption, personalized housing consumption will become more prominent, not only to keep the wealth created by Chinese at home, but also to attract foreign wealth to China, it is necessary to reform the real estate development model with apartments as the absolute mainstream.

Reform cannot be carried out smoothly at any time, and there is a window period for reform. The current real estate market environment has created market space for the launch of personalized housing, and it is a good time to carry out relevant reforms. The time for reform is now.

Some people may argue that personalized housing needs will take up more land, which in turn will affect food security, etc.

If we take a careful look at food consumption in the world today, we will find that food scarcity has more to do with whether a country or region is poor or not, and has little to do with the amount of land and arable land. The only way to avoid food shortages is to rely on wholeheartedly developing the economy and relying on the development and popularization of agricultural technology.

Our urban homes today have practical problems and aesthetic deficiencies. Walking through the countryside of Chinese mainland and looking at the thousands of newly built houses, on the one hand, I am happy that the living standards of ordinary people have improved; on the other hand, I can't help but sigh: what house can have the aesthetic value of preserving hundreds of years like the Ming and Qing dynasties in China or the European countryside?

A sigh.

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Personal opinion, for reference only