The day before yesterday, the most important meeting of the year was held in Beijing, and the proportion of real estate at this meeting reached the largest since the epidemic.
Guaranteeing the delivery of housing and implementing policies for the city are reserved programs, which will not be discussed in detail, but the point is that such a sentence was emphasized at this meeting.
"It is necessary to combine the new changes in the supply and demand relationship of the real estate market and the new expectations of the people for high-quality housing, coordinate the study of policies and measures to digest the stock of real estate and optimize the incremental housing, and pay close attention to the construction of a new model of real estate development to promote the high-quality development of real estate"
One sentence expresses the important directions of the three property markets.
First of all, "new changes in market supply and demand" means that oversupply has become a reality.
The current state of the market is that the ratio of houses to pick-ups is worse than the imbalance between men and women.
Secondly, "overall research and digestion of stock real estate" means that destocking 2.0 has officially begun.
There is no doubt that the inventory of new homes has reached the point where it needs to be systematically depleted again, which further confirms the fact that the property market has completely become a buyer's market.
Finally, "optimizing incremental housing" is better understood, and some cities with large inventories will completely stop supplying land to achieve the purpose of controlling market supply and demand from the source.
The Ministry of Natural Resources has issued a document to cooperate with this, and the current land policy is to de-convert cities for more than 36 months, and the supply of residential land must be stopped immediately.
The imbalance between supply and demand, the removal of inventory, the cessation of land supply, and the property market basically belong to the dream back to 2015.
1
The cyclical nature of the property market is constantly circulating, destocking in 2015 and destocking in 2024, and completing a cycle in 9 hours.
It seems that it has come a long way, but in fact, it has not moved forward, and the property market has just turned around and returned to the original point again.
The last destocking had a lot of sequelae, such as the high leverage ratio of the residential sector and the peak of debt space, the accumulation of sky-high debts of real estate companies, and the deepening dependence of local governments on land finance.
And most seriously, the asset bubble has been inflated far faster than household incomes.
If the income of residents is the foundation, and the asset price is the building on the foundation, the current foundation is already full of holes, and the building on the foundation is also crumbling.
The thunderstorm of real estate companies, the unsalable of new houses, the formation of dammed lakes for second-hand houses, and the fact that local finances are so tight that they cannot issue the promised housing subsidies on time are all the results of the bubble beginning to shake.
I thought that the monetization of shantytown reform was a "helpless choice" under Keynesian policies, so that it could be exchanged for better prospects, but what I didn't expect was that today, nine years later, everything is back to square one.
Not only is it back to square one, but the situation is even worse than it was 9 years ago.
Nine years ago, there were a large number of shantytowns that could be demolished, and there was a very low leverage ratio in the residential sector that allowed individuals to borrow money to buy a house, but now these are no longer there.
Some are just bubbled prices and individuals who can no longer afford to borrow.
I thought that the bubble would burst and be reborn, and the real price would be used to reactivate the motivation of individuals to enter the market, but the shackles of debt have strangled the real estate companies, the financial system behind the real estate companies, and even the neck of the local finances.
Everyone probably knows that bubble prices exist, but in order to continue this financial game of beating the drum and passing on debts, they have to turn a blind eye.
Banks and even the entire financial system have been deeply bound to the real estate bubble, so the property market cannot collapse.
Local finances are too dependent on the financialization of land to issue bonds, and borrowing has become a matter of course, and the use of debt to repay debts has also become a daily choice.
There is no choice but to continue to destock.
In fact, strictly speaking, there is no such thing as destocking in the property market, and at most it can only be called the transfer of inventory.
In 2015, the inventory removal method of first shed reform and then price increase was indeed successful, and the people who were shed reform were equivalent to accelerants, and the demolition money in their hands became the most important props to re-ignite the property market.
But the larger inventory is not actually digested by the demolition crowd, but by the people who follow the trend and buy a house.
Note that this is not to make these new homes disappear from this world out of thin air, but only from the hands of real estate companies to the hands of individuals.
These individuals are divided into two types.
First of all, they just need to buy for their own residence, this kind of people don't care, because after they have experienced a housing price overdraft, the ability to replace it again has been greatly delayed, and the property will be held in their hands for a long time.
The second is to invest in buying appreciation, this kind of talent is the key to the property market, and the real estate in their hands is, in a sense, only "saved" for real estate companies.
And there is only one reason why they are willing to hold these cement shells at high interest rates.
Appreciate.
2
As long as the value of the property in hand is still appreciating rapidly, then everything is easy to say, and once the appreciation of the house stops or even falls, these people no longer have any reason to hold on behalf of them.
Selling is their only common option.
From the middle of 2023, the number of second-hand housing listings has skyrocketed to the present, which is the best example, these people will not replace the money like the people who just need it, they are really cashing out and running away.
They will never do such a thing as meat rotting in the pot.
It's also true that an asset that has begun to burst in a bubble is no longer attractive for people to throw money into.
Therefore, if the property market cannot give hope to these investors, then these people can only become a group of "passive" accomplices who overthrow the property market price system.
At the beginning, it was honey and then arsenic, and it was originally relied on the upward trend of the property market to attract these investment groups to take over the inventory of real estate companies, because in the future, these houses can be increased in value and can be used to cut the leeks that are just needed for subsequent entry.
Now that there is no hope, these people will sell off their properties one after another, and the important thing is that their sell-off has suppressed the price and transaction of the second-hand housing market, resulting in people with normal replacement needs being stuck out of the new housing market.
The second-hand houses sold by these investees and replacement groups will eat up the market's remaining purchasing power (still not a large amount of replacement demand), resulting in the new housing inventory of real estate companies continuing to remain at a high pressure.
In the past few months, the number of second-hand housing transactions in many cities has surpassed that of new houses, which is the best evidence.
Therefore, the current situation of the property market is that there are more wolves and less meat, and the number of houses is far greater than the demand of individuals.
So wolves must be beaten.
However, the second-hand housing market cannot copy the fall limit order for new houses or lock the liquidity with policies, so there is no choice but to temporarily lock up the 'wolf'.
This is the purpose of local second-hand housing.
Same recipe, different packaging.
In 2024, the destocking of the property market will no longer be opened with dusty demolition sheds, but replaced by second-hand houses on the market by local urban investment collection.
First, take away the second-hand houses in the hands of individuals who have replacement needs, let these people take the money to the designated new housing real estate to buy new houses, and then wrap the second-hand houses with a layer of affordable housing, and then put them back on the market.
That's the point.
It seems that the inventory of new houses has been removed, but the houses that have been collected and stored have not disappeared or been demolished, but are only temporarily stored in the hands of urban investment or other state-owned enterprises.
Sooner or later, these houses will return to the market as affordable housing.
With the addition of a middleman, and then pushed to the market again in the future, the act of collecting and storing is still in circles in essence, and there is no difference from the previous way of "temporarily storing" in the hands of investors.
The question is what to do when the circle is over? When the time comes, it will not be the demand for second-hand housing and new housing, but affordable housing.
3
Affordable housing is also a house, can this house be inhabited? Of course it can.
Given the current policy on affordable housing and the trend of population decline in the future, it is almost certainly no problem.
In other words, affordable housing can fully meet the requirements of housing and all the social resource needs that come with it, such as education.
In this case, is there another range of choices for people who just need it?
Does giving more choices to people who just need it mean that the new housing market for commercial housing will be more likely to be diverted in the future?
Nothing has changed.
There are still so many houses, and it is only a matter of time before these houses disappear for a short time and return to the market.
The key is this, no matter how the nature of the house changes, no matter how clean the financial attributes are stripped (closed-loop circulation of affordable housing), as long as the residential attributes still exist, it is the biggest impact on the commercial housing in the property market.
Why did the property market soar after the shantytown reform in 2015? In addition to the fact that the residents' debt space at that time still had to be tapped, more was the lack of affordable housing.
Without the support of affordable housing, or the diversion of affordable housing to potential buyers, residents who just need it can only tighten their belts and become a glorious commercial housing owner.
It's not that residents like to be burdened with heavy debts, it's not that residents like the feeling of being pressed by mortgages, and it's not that they have to buy commercial housing.
I really don't have a choice.
If we look back at the development process of commercial housing, we will find that the development and promotion speed of the entire affordable housing system in the same period is quite conservative compared with the commercial housing in the same period.
I don't know if there is any "unspeakable hidden" in this or if there are indeed any specific difficulties, but there is a clear problem, from the perspective of the real estate industry, especially commercial housing, affordable housing is a competitor to grab jobs.
What's more critical is that the appearance of affordable housing seems to only rob the jobs of real estate companies, and at a deeper level, it still robs the jobs of land finance and financial institutions.
The huge amount of credit resources in the financial system needs to be invested by the local government, and the huge land resources under the local land finance system need to be taken over, which can only be done by real estate companies that develop commercial housing.
It is conceivable that there will be many obstacles on the way to the advancement of affordable housing.
However, as long as there is a guaranteed housing that reaches one-third of the volume of commercial housing and enters the market smoothly, the property market will definitely not be able to get out of such a "deformed" bull market.
4
Therefore, there is almost no solution to the problem, and now after collecting and storing a large number of second-hand houses, it may be possible to solve the "partial" current inventory problem, so as to make the property market recover.
But what about the future? The problem of inventory is only temporarily covered up by the act of "collecting and storing," but it has not been solved.
When these houses are reintroduced to the market under the name of affordable housing, will the remaining purchasing power in the property market be enough?
Have you already thought of a good strategy for the corresponding, or are you ready to take a step by step and continue to cross the river by feeling the stones?
Don't think that there is a long buffer period in the middle, it is an indisputable fact that local finances are tight, and the situation that many cities have not paid housing subsidies in place a while ago is ironclad evidence.
In order to stimulate the property market, various subsidies promised to buyers are either suspended or delayed, and even this kind of housing purchase subsidies related to the future of local land finance are not issued in a timely manner, and the pressure can be imagined.
Now letting local state-owned assets and urban investment collect and store second-hand houses is basically equivalent to letting a person who has exhausted himself run a marathon again.
If it is linked to this year's shouting to speed up the affordable housing system, it is foreseeable that the second-hand housing of local real money will become a "hot potato" to a certain extent, and must be re-introduced to the market as soon as possible.
Although affordable housing is not for profit, it can still get back some blood whether it is sold (closed-loop non-market circulation) or rented.
Therefore, even if the act of collecting and storing can buy some breathing time for the market, this time will not be long.
This is still based on the premise that the local government can collect and store large sums of money, according to the current 2,000 sets of pilot storage such as Nanjing, this kind of strength will not talk about any inventory.
It's a drop in the bucket.
The policy has always been a combination of punches, perhaps considering the limitations of the collection and storage of second-hand housing, so it is accompanied by the policy of "optimizing incremental housing".
This is equivalent to already playing the cards face-up.
The Ministry of Natural Resources issued a document requiring cities that have exceeded 36 months of inventory destocking to completely stop supplying land.
If the bread cannot be sold, no more flour should be supplied to the market, and the speed of new housing in the downstream primary market should be adjusted through upstream raw material suppliers, that is, to control the rhythm of land transfer at the local level.
The idea is good, but I don't know if the pressure of the "three guarantees" at the grassroots level can be withstood in these cities that have stopped supplying land.
5
In fact, the problem of the property market is still in itself.
The real estate industry has indeed driven too many upstream and downstream industries and related practitioners' income.
But the real estate boom is more akin to an "ineffective boom" in terms of the debt generated and the purchasing power demanded by the real estate itself.
The employment and income generated by this industry cannot even meet its own disorderly growth needs.
Just as in the twenties of the twentieth century, before the Ford factory in the United States carried out income reforms, the expansiveness of capitalism and the extreme exploitation of every profit led to an embarrassing situation.
That is, there are more and more cars coming off the assembly line, but the number of people who can buy cars has not increased at the same time.
Like our property market?
Houses are being built faster and faster, and the number of people buying them is relatively smaller, and with it, there is a huge amount of inventory in front of you.
Once in 2015 and again in 2024.
Why can't you get out of this cycle?
Because of the lack of dividends.
Real estate has indeed led to a lot of employment and increased the income of people in related industries, but this is too far from the housing prices driven by its horrific debt growth.
Therefore, what we see is that the prosperity of the industry is generated by overdrawing the debt of individuals, and in contrast, the dividends brought to individuals by multiple upstream and downstream industries of real estate have not had time to offset their increasing debt burden due to the increase in housing prices.
Ford eventually made improvements, dramatically raising workers' wages, and even causing other car companies to keep up with the involution, and ultimately better revenues, which correspondingly supported the company's expanding production capacity.
This can be regarded as a kind of "profit-making" self-redemption of capitalism.
Coming back to the property market, although we will not reach the point where we can't afford to build a car, it is true that those involved in a series of real estate industries will not be able to eliminate this continuous supply of houses.
This is also the fundamental reason why inventory will come again after a few years.
The emergence of inventories is inevitable, not accidental.
This is not only the real estate industry itself, but also other individuals in the industrial chain, who will not be able to keep up with the speed of debt expansion required by the real estate boom through labor income.
Real estate is faced with a lack of effective demand, and effective demand is precisely the most difficult to "cultivate".
In the end, individuals could not afford to borrow, so the debts of real estate companies piled up, which then led to a tight local land finance, and finally everyone did not have a good life.
Destocking is the solution, but not the long-term solution.
Therefore, when income growth cannot keep up with the demand for property market debt for the time being, the key to solving the problem of deformed debt in the property market and the obsession of the financial system and local finance with land financialization may be the key to solving the problem.
To put it simply, since it can't satisfy the appetite of the property market, it is best to have a gastrectomy operation for the property market.
The cost of this must not be small, but the local fiscal demand, the desire for profit within the financial system, and the expansion of money at the macro level will have to find a new medium to replace real estate to compensate for their own needs.
If all of the above cannot be done "temporarily", then we can only rely on the method of collecting and storing second-hand houses as affordable housing to give the property market a few small doses of placebo.
Let's take one step at a time.
That's it.