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The statements in this article are based on reliable sources of information and are repeated in the middle of the article
Text丨Rumeng History Museum
Editor丨Rumeng History Museum
Preface
After decades of peaks, the real estate industry has ushered in a trough in the industry this year, with housing prices plummeting and transaction volume shrinking, and the future development of real estate can be said to be dark.
At this critical moment, Wang Shi, the founder of Vanke Group, who successfully fulfilled the first two predictions, boldly made the third prediction and pointed out the current situation of real estate with a sharp point.
So what exactly is Wang Shi's prediction? How should we, the common people, respond?
The first two predictions
In the process of China's economic take-off in contemporary times, the real estate industry is undoubtedly the focus of the most attention and controversy. This industry not only represents the prosperity of capitalism in China, but also forms an important pillar of the country's economic development.
However, disorderly real estate speculation has also brought many problems and has become a concentrated manifestation of social contradictions. In this context, Wang Shi, the former chairman of Vanke Group, made a series of forward-looking judgments with his keen business sense.
In 2007, when China's real estate boom was in full swing, a large amount of money poured in, and countless businessmen coveted this new investment field, hoping to get a piece of the pie.
However, in this jubilant atmosphere, Wang Shi made an unusual sound. He did not completely dismiss the prospects of the real estate industry, but he was keenly aware of the danger of over-inflation in the market.
Wang Shi foresees that the overheating of real estate will inevitably lead to chaos, which in turn will force the government to take control measures. This idea didn't get much attention at the time, but over time, it did come true.
The government has successively introduced a series of regulatory policies to try to curb the risks of real estate speculation. At the same time, Wang Shi also made an incisive analysis of another trend.
With the advancement of urbanization, more and more people are beginning to pursue urban life, and consider buying a house as an important step towards modernization. This "buying tide" is unstoppable, which not only promotes the rise of real estate transaction volume, but also makes "speculation" speculation increasingly rampant.
In the face of this phenomenon, Wang Shi issued a very insightful warning. He believes that the essence of a house is to meet people's living needs, rather than simply a commodity and investment tool.
This rational understanding coincides with the government's positioning of "housing for living, not speculation", and is of great significance for standardizing market order and maintaining the healthy development of the real estate industry.
It is worth noting that Wang Shi's insight into the real estate market is not groundless. He made an in-depth analysis of some of the unfavorable factors at that time, such as soaring land prices and housing prices, rampant speculation, and developers chasing huge profits while ignoring the actual residential value. The existence of these problems has undoubtedly exacerbated the instability of the market.
In the 20s of the 21st century, China's economic development has entered a new stage, and in this context, people's enthusiasm for real estate investment has cooled.
On the one hand, the employment situation is severe, and the disposable income of the working class is under great pressure, and on the other hand, the problem of high housing prices and unfinished properties has made it difficult to buy a home. At the same time, the improvement of the rural environment also provides new options for staying in the hometown.
In the face of this new situation, Wang Shi once again made a unique voice, advocating a slowdown in the pace of Vanke's expansion, prioritizing corporate cash flow and scale control. This strategy has enabled Vanke to avoid the debt crisis faced by giants such as Evergrande, demonstrating Wang's far-sighted strategic vision.
Third prediction
At a time when China's real estate market is at a critical juncture, the latest predictions and analysis by Wang Shi, the former head of Vanke Group, as a veteran observer and practitioner of the industry, deserve special attention and attention.
At the end of 2023, Wang Shi once again voiced his authoritative voice, believing that the current Chinese real estate market needs to go through a 3 to 5 year adjustment cycle before it is expected to regain its vitality and usher in a comprehensive recovery.
This judgment stems from a thorough consideration of the bursting of the Japanese housing bubble in the 90s and the subprime mortgage crisis in the United States in 2008. Historical experience shows that the high debt expansion model and the serious decoupling of asset prices from reality will lay the root cause for the real estate industry.
Looking ahead, Wang Shi expects that there will be a large-scale restructuring and reshuffle in the real estate market, and those real estate companies with tight capital chains and high debt ratios may not escape the fate of being eliminated or acquired and restructured.
At the same time, some short-sighted, speculative and speculative practices will also be spurned by the market. Only high-quality enterprises with stable balance sheets, focusing on their main business and rational operation can stand out in this competition and become the backbone of supporting the development of the industry.
However, even in the face of many challenges, Wang Shi is still optimistic about the future of the market. He believes that as long as the policy guidance is appropriate, housing prices will return to a rational level, and real estate will completely get rid of the past investment attributes, and truly return to its residential attributes, providing people with diversified and affordable housing options.
At that time, China's real estate market will be like a chrysalis breaking out of its cocoon and ushering in a new stage of development. As an important livelihood industry, the healthy development of real estate is related to the national economy and people's livelihood.
Therefore, Wang Shi's foresight and systematic analysis are not without reference, and he has faced the current predicament, clearly pointed out some stubborn diseases and misunderstandings in the industry, and sounded the alarm for policymakers and industry insiders.
Achieving this goal will not happen overnight, and will require the full and long-term cooperation of all parties. The government needs to take active action and regulate in a timely manner, and enterprises should examine themselves and innovate the old.
The majority of home buyers should establish a rational concept and jointly contribute to the healthy development of the industry. With such all-out efforts, China's real estate industry will eventually regain its vitality and create brilliance.
How the common people responded
The turmoil in the real estate market in recent years has made everyone think twice about buying a home. While the views from industry veterans such as Wang Shi are worth paying attention to, we should not rely solely on the predictions of others, but should weigh the pros and cons according to our own actual situation and needs.
Buying a house is a life-long decision for the average person and needs to be treated with caution. We should collect information such as government reports and industry analysis extensively, and combine it with personal financial situation and housing needs to make rational judgments.
A series of government policy measures, such as housing price regulation and tax incentives, are aimed at pointing out the direction for the market, but the specific implementation effect needs to be tested in practice.
Whether it is a new house or a second-hand house, you need to weigh the advantages and disadvantages when buying, although the price of the new house is higher, you can decorate it according to your preferences; Second-hand houses can be moved in directly, eliminating the trouble of decoration.
For a new home, although the initial cost may be higher, choosing a new home means being able to start from the foundation, build your dream home, design the layout of the space according to your own aesthetics and living habits, choose materials and quality, which will undoubtedly bring a sense of accomplishment and satisfaction.
At the same time, new homes are often located in emerging neighborhoods or well-planned areas and may enjoy more modern amenities and a better living environment.
On the other hand, second-hand homes offer a more convenient lifestyle, as these properties are often already occupied, so buyers can skip the time and money invested in redecorating and enjoy ready-made home amenities directly.
Moreover, many second-hand homes are located in mature communities, and the surrounding living facilities such as schools, hospitals, shopping malls, etc. are already very mature, which is very attractive for families with children, or buyers who want to integrate into community life as soon as possible.
In terms of financial policy, in order to alleviate the financial pressure of home buyers, some cities have begun to increase the loan amount of the housing provident fund. This means that individuals who buy a home with a CPF loan can enjoy a lower interest rate on the loan, which can reduce their monthly payments and reduce the financial burden on their families.
This measure is undoubtedly good news for those home buyers who rely on the provident fund as their main source of funds. In addition to this, proposals for the abolition of shared housing areas have also been put forward and discussed in some areas.
The shared area refers to the public areas in the residential community, except for private residences, such as corridors, elevator halls, parking lots, etc., and the maintenance costs and property rights of these areas are often borne by all residents.
However, in practice, there is a certain amount of controversy and opacity in the operation of this system, which leads to the damage to the rights and interests of home buyers. If this recommendation is implemented, then buyers will be able to have a clearer understanding of the actual usable area of the property they are buying, avoiding unnecessary financial losses, which will bring real benefits to buyers.
In the face of severe market fluctuations, real estate companies must change their business philosophy to meet the individual needs of consumers in order to regain the trust of the public.
From a social point of view, policies that are conducive to residents' housing purchase can not only stabilize the family economy, but also promote the improvement of the overall consumption level and inject new impetus into economic development.
We should remain rational and not be swayed by the rhetoric of experts or have high expectations for policy. Only with the full cooperation of the government, enterprises and the public can the real estate market achieve healthy and orderly development, balancing economic interests and people's livelihood and well-being.
epilogue
The real estate market is undoubtedly an area full of opportunities and challenges, on the one hand, it provides many people with the opportunity to accumulate wealth; On the other hand, cases like Evergrande's are a reminder that risks are always there.
Therefore, homebuyers need to be vigilant and carefully consider their options. At the same time, real estate enterprises should also actively respond to national policies and adjust their business strategies to ensure the sustainable development of enterprises.