The drumming of real estate has finally come to an end

Luo sir's words

2024-05-05 16:54Posted in Sichuan Workplace Creators

If real estate is compared to a relay race, then who is this hot stick in the hands of now?

There is a ceiling to the price of any asset, just as today it is believed that house prices cannot go up forever, but at least five years ago, most people did not think so.

The sharp rise in real estate prices is closely related to the domestic economic structure.

On the one hand, after the 94 tax reform, the local revenue focus on the land transfer fee, which in disguise encouraged the local development of real estate enterprises; on the other hand, the pursuit of GDP growth, but also let us focus on real estate, after all, the price of millions is the fastest shortcut to increase GDP, there is no one.

In the most rapid years of real estate, this industry is almost 20% behind the mainland's GDP, and real estate is the pillar industry of the mainland, which is no exaggeration.

Today, from driving the economy to dragging economic growth, real estate has completed its historical mission, but it has brought a series of far-reaching impacts, far from the end.

I saw it rise up, and I saw it collapse.

The abolition of purchase restrictions is another typical feature of real estate growth coming to an end.

In addition to the easing of qualifications for home purchases in first- and second-tier cities, including Beijing, which has recently relaxed the 14-year purchase restrictions, it fully shows that the high-growth model of real estate in the past has come to an end.

And at this time, the embarrassment of the real estate industry really began to be revealed.

Of course, the lifting of purchase restrictions can easily be interpreted as stimulating the demand for buying houses, but from the buyer's point of view, the more vigorously promote people to buy houses at this time, the easier it is for buyers to panic and worry that housing prices will fall again.

Once the expectation of a decline in housing prices is further realized, it will never be possible for real estate to return to its former glory.

Beijing's Housing and Urban-Rural Development Commission announced on April 30 that three types of eligible buyers will be allowed to purchase a commercial house outside the Fifth Ring Road: Beijing citizen families who already have two apartments, single Beijing citizens who have one apartment, and non-Beijing citizens who have paid insurance and taxes in Beijing for five consecutive years.

Long before Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Tianjin, Xi'an and Hainan had already loosened purchase restrictions, but Chengdu has been more thorough.

Since April 29, Chengdu buyers no longer review household registration, social security and other conditions for buying houses, nor limit the number of units purchased, according to the statistics of Zhuge Data Research Center, Chengdu is the 22nd key provincial capital city after Wuhan, Hefei, Nanjing and Changsha and other places, and 35 cities across the country have relaxed purchase restrictions.

The relaxation of purchase restrictions means that people are stimulated to buy houses, and it also means that local fiscal revenues have become more difficult after leaving the land transfer fee.

Taking Chengdu as an example, judging from the data, almost 50% of Chengdu's income in 2022 will depend on land transfer fees, which is difficult to imagine for a large city with a population of 20 million.

With the decline of real estate, local land transfer fees have decreased, and it is natural to hope that real estate can recover to a certain extent, especially when there is no other source of tax revenue in the local area.

The embarrassment of real estate is also that when housing prices rise, there are more restrictions on buying houses, which stimulates people's determination to buy real estate.

But when housing prices are expected to fall, loosening the property market at this time is more like a means of sales. In the case that there is no sign of a rebound in housing prices, the people dare not enter the market, and the more the local government works hard to promote the purchase of houses, the more panicked the people are, fearing that housing prices will fall further, thus entering a "dead circle".

But restricting purchases doesn't mean it's useless.

Although the stimulating effect of real estate on economic growth has failed, to a certain extent, real estate is not only an industry, but also a symbol of the future trend of the macro economy as a whole.

For consumers who have "sold the old for the new", the lifting of the purchase restriction order does help to stimulate people to buy houses.

However, under today's increasingly pragmatic consumption atmosphere, the real practical effect of stimulating the purchase of houses may be very limited.

According to the estimation of Lu Ting, an economist at Nomura Securities, there are as many as 20 million unfinished buildings in China alone, and it is actually very difficult to destock such a large volume, especially after the real estate has been soaring for more than ten years.

The core problem of domestic real estate today lies in demand, and the more critical premise is that due to the debt of real estate developers, consumers have lost confidence in investing funds in the property market, so as long as the debt and leverage ratio of real estate companies remain high, then the first-hand market will be impacted, and buyer demand will be low.

And for those families who buy houses at a high price, the game of beating the drum and passing the fancy game of real estate is basically a complete finale for them.

The wave of real estate from the very beginning, it was not purely for living.

Since the introduction of the market economy in the mainland, a large number of private wealth has nowhere to go, in the case of the stock market downturn, foreign exchange control, it is difficult for ordinary people to enjoy the dividends of macroeconomic growth, and because of this, when a large amount of private wealth begins to accumulate rapidly, real estate, as a possible investment product, will inevitably usher in an explosion.

But no one could have predicted that its explosion would last so long.

Housing prices in mainland China have soared by more than 300% in the past 20 years, and housing is regarded by ordinary investors as the fastest and safest way to get rich.

The spiral of real estate values and residents' stock debt has also sparked a long-term discussion about the housing bubble, which is no longer an issue today, and the housing bubble has become a consensus, and the only disagreement has become a hard or soft landing.

According to a China financial survey compiled by Southwestern University of Finance and Economics, in 2013, more than 60% of domestic residents spent their household savings on buying houses, and this figure has increased to 73.8% in 2017, almost twice that of the United States.

According to Warren Buffett's book, eggs should not be put in the same basket, which means that the risk resistance is insufficient. When more and more people use their family wealth to buy houses, once the macro economy suffers from uncertainty and the real estate downturn, the first thing to be affected is the downgrade of consumption.

Spending so much money to buy a house, in addition to living, the only purpose is to preserve and increase the value. This is also due to the limited investment channels and the opaque environment of domestic residents, which has led to the income growth of many people only in the form of wage income, and nothing else.

In 2018, the wage income in the domestic per capita disposable income was 15,800 yuan, and in comparison, the operating income and property income were only 4,900 yuan and 2,400 yuan.

The dividends of the development of the times, the stock market is far away from ordinary people.

Subject to the long-standing foreign exchange control, domestic residents have a single investment channel, and in the case of the stock market downturn, P2P crash, and underdeveloped bond market, people have invested back and forth several times, and may finally reinvest in real estate.

But now, the situation has become even worse.

It's more of a joke when real estate isn't worth investing in: more and more people are putting huge sums of money in the bank.

In the past four years, the total amount of savings has exceeded the total of the previous decade, and now there are more than 140 trillion yuan of household deposits lying in the bank, which is a record high.

When real estate is not worth continuing to invest in, the stock market is still sluggish, and the bond market is still underdeveloped, it is more like a helpless move to keep money in the bank to eat interest.

Many people are happy to see the downturn in real estate, but if we think of the deep binding of real estate and the macro economy, we will find that once the real estate falls into a technical recession, then our overall macro economy will not be too good, such a huge industry, it will eventually backfire on the economy itself.

No one is immune.

Labor pains, recessions, cycles, these problems will be accompanied by the real estate downturn and fall into unpredictable changes, more and more deposits in banks, fewer and fewer loans, consumption is more and more sluggish, these factors will eventually lead to the failure of monetary control policy.

And this is the most terrifying.

end.

Author: Luo sir, concerned about the economy, society and everything in our world, curious about the logic behind the development of things, optimistic pessimist.

View original image 43K

• 

• 

•