Whether there is a surplus of houses in China has always been a topic of controversy from all walks of life. Last year, the National Bureau of Statistics released data that the mainland has 600 million houses, and if each house lives 10 people, it can meet the housing needs of 6 billion people. It should be noted that this is only the stock of houses, and there are at least 14 million new commercial houses to be put on the market every year. Obviously, no matter how you look at it, there is already a serious surplus of houses on the mainland.
As a result, many netizens are puzzled, since there is a surplus of houses in China, from the past seller's market, to a buyer's market, why do developers still build houses on a large scale every year? Aren't you afraid that the house will rot in your own hands? In this regard, the famous economist Wen Tiejun gave the answer in one sentence, he once said: "The person who buys a house is not necessarily the person who houses the house."
In fact, economist Wen Tiejun means that if the house is used for self-occupation, then there is already a surplus of houses in the country, and there is naturally no need to build any more houses. If buying a house is not used for self-residence, but is used as an investment bargaining chip, then there is not only no surplus of houses in the country, but also not enough. We believe that there are three main reasons why developers continue to build houses despite the fact that there is a surplus of houses in China:
First, developers are in debt and can't build houses
Many developers are now heavily indebted or even insolvent. In this case, you can only continue to acquire land and build houses. Because, if you don't take land to build a house, you can't find a reason to apply for a loan from a bank. And without development loans, coupled with a sharp decline in sales performance, the developer's capital chain will be broken. Therefore, in order to survive, developers can only continue to acquire land to build houses and apply for loans from banks.
In addition, even if the developer wants to destock first, return the funds in time, and then build a new house. If you owe a large amount of money to the bank before, the bank will worry that you will not be able to pay it back, and it is likely to choose to withdraw the loan. Therefore, developers can only continue to build houses, so that it is possible to obtain loan support from banks and avoid a liquidity crisis.
Second, developers are being encouraged to acquire land to build houses
Now developers can't even build houses in large quantities. Because many places rely on land finance, if developers do not take land to build houses, land revenue will be greatly reduced, which will affect local fiscal revenue. Therefore, developers are encouraged to acquire land to build houses, so that the funds needed for civil servants' salaries and infrastructure investment will be secured. In addition, developers can also stimulate the continuous growth of local GDP and solve the employment problem of a large number of workers. Therefore, although there is a surplus of domestic housing stock, developers still can't stop.
Third, speculators buy houses for investment
In recent years, the interest rate on bank deposits has been getting lower and lower, but the prices related to people's lives have been getting higher and higher. As a result, many rich people have become speculators. They don't buy for their own use, and they don't buy for rent. Instead, use the house as an investment bargaining chip, and wait until the price of the house rises before selling it.
Therefore, the real estate market is still a speculative market. If real estate is to be de-invested and returned to residential properties, it is necessary to levy a property tax to increase the cost of holding a house. In fact, the introduction of real estate tax can not only alleviate the decline in land fiscal revenue in various localities, but also resolve the problem of declining fiscal revenue in various localities.
Now there is indeed a serious surplus of housing stock in the country. But what is strange is that a large number of newly built commercial houses enter the market every year. In this regard, economist Wen Tiejun gave the answer in one sentence, he said: The person who buys the house is not necessarily the person who houses the house.
This shows that the domestic real estate market has lost its residential attributes and has become an investment bargaining chip. So, no amount of building is enough. It is imperative to introduce a property tax, which can not only curb the demand for speculation, but also allow local governments to get rid of their dependence on land finance.