Energy control is transmitted to real estate: the cost of construction and security has risen sharply, and profits have been squeezed again

Tighter credit, tight control of the property market, and financing difficulties have brought a lot of pain to housing enterprises, and in recent months, construction costs have soared, which has made the situation worse for some housing enterprises.

"Construction costs have now reached their highest point since 2008." A person from a real estate enterprise in East China told First Finance.

After the epidemic, a large number of safe-haven funds entered commodities, causing the price of materials to rise in the market, and the prices of iron ore, coal, rebar and cement have risen one after another. Some housing enterprises with keen perception clearly felt the upward trend of construction and security costs in May this year. After the middle of August, the double control of energy consumption and the power ration of the gate have brought about a wave of rising prices of cement and steel.

For housing enterprises that are eager to complete the sales target, it is imperative to reduce prices at the end of the year, but due to the increasingly high cost, selling houses at a loss will only put the company into a vicious circle, which is really a dilemma.

Raw material and labor costs have skyrocketed

"Cement is a high-energy consumption industry, and the transportation radius is about 300-500 kilometers, basically for local production, local use, cement prices vary greatly, such as cement in Ningxia before 300 yuan / ton, Guangdong is 500 yuan / ton." However, at present, cement prices in most parts of the country are soaring. An analyst familiar with the cement industry told First Financial Economics.

A person engaged in the construction engineering industry said that after two months of price increases, Guangdong, Zhejiang, Zhejiang cement quotations exceeded 700 yuan / ton, Hunan cement manufacturers factory price recently rose by more than 350 yuan / ton, due to everyone's production reduction expectations, many places have appeared in the long queue to buy cement spectacular scene, there are dealers the highest quotation of more than 1,000 yuan per ton.

Behind the price increase of cement, on the one hand, the price of bulk raw materials has been rising after the epidemic, such as limestone, slag, coal, etc.; second, it has been affected by the dual control of energy consumption and power rationing. According to the price adjustment letters of a number of cement manufacturers, most of the reasons for the price increase are the inability to produce normally due to power rationing. In addition, some manufacturers have increased prices due to market marketing conditions and comprehensive production cuts.

The price of steel, another important production material for real estate, is also rising all the way, with an average increase of more than 1,000 yuan per ton. Some insiders believe that the global mismatch of resource supply has promoted the rise in raw material prices, stable demand for real estate, resulting in the stability of the basic steel plate, in addition to the high manufacturing boom, boosting the steel boom. Moreover, this year, the relevant policies of de-output have been proposed in China, and the supply of steel has shrunk to a certain extent.

In addition, the above-mentioned construction project personnel also said that at present, the upstream raw materials of home building materials in the country are rising in price, including wood, plastics, glass, hardware, etc., and most of these raw materials have risen by more than 30% this year.

"Since the end of July this year, our company has been keenly aware of the sharp rise in the price of raw materials for construction." A real estate industry insider told CBN.

According to his company's internal calculations, from May to July this year, steel prices soared by 50%, concrete prices rose by 8%, resulting in a more than 13% increase in project costs, and august has been even more violent.

Another housing company insider said that the cost of construction and security has generally increased by more than 10% recently, and the price of earthworks and steel bars is rising every month, and the unilateral cost of the basement alone has reached 6500 yuan, an increase of more than 30% in half a year.

"Since May, the price increase of raw materials has been transmitted to real estate. At the beginning of this year, the epidemic and inflation led to an increase in the price of thermal coal and iron ore, and the price of rebar rose in March, cement rose together, and the power ration has made it worse. The person told First Financial Economics.

In addition to raw materials, construction labor costs have also risen sharply this year. An insider of a real estate company said that labor costs at construction sites increased by more than 15% year-on-year this year. Another executive of a large construction company told First Finance and Economics that it is extremely difficult to recruit workers this year, the age of workers is mostly in their 40s and 50s, and the inability to recruit young people has become a serious problem faced by enterprises.

The price reduction of housing enterprises is like drinking and quenching thirst

After July this year, the new housing market has gradually "turned off", especially in third- and fourth-tier cities, there is no more scene of grabbing houses, and the cold sales office has become the norm.

Affected by regulation, the entire real estate market has formed a price reduction expectation. Since the second half of this year, the price war for developers has begun.

However, in the context of the soaring cost of construction and security, do housing companies still have room to reduce prices?

"Now that the mentality of home buyers has changed significantly, they are all waiting for price reductions, and we can only painstakingly list the current cost increases and tell them that it is impossible to reduce the price of the project." A front-line marketer of a housing enterprise that focuses on the demand for improved real estate in the Yangtze River Delta told First Finance.

However, in the case of huge debt pressure, there are indeed housing companies that would rather lose money than grab the recovery of money, playing a "fracture price". In this regard, the president of a housing enterprise in East China believes that this kind of behavior will inevitably lead to a vicious circle of enterprises. "It is impossible for real estate companies to idle without making money, idling for two years at most, and the loss of money can not be maintained in the end."

But he also believes that the situation in the next three months of this year is not optimistic, the real estate market has always had a "buy up not buy down" mood, even if the developer cuts prices, I am afraid it is difficult to attract traffic, and the negative effects of price cuts also include damage to product quality and service.

The downward cycle of the property market superimposed raw materials soared, and real estate developers were hit hard.

According to the general industry rules, after the housing enterprise signs a contract with the contractor, if the raw material rises or falls within a certain extent (such as plus or minus 5%), the contractor will digest the price change by itself, and if the rise or fall is too large, the price change mechanism will be triggered. After the surge in raw materials, housing companies and suppliers are jointly under great pressure.

In the past, in order to obtain long-term orders from large customers, suppliers were willing to advance funds or accept commercial tickets, even if they were owed by housing enterprises, they were willing to negotiate privately and try to think about customers. This year, under various pressures, the contradiction between housing enterprises and suppliers has gradually broken out.

"In the second half of the year, the number of project site shutdowns increased, and the situation of general contractors and developers publicly tearing their faces has also occurred, which is also related to the rise in raw materials and the huge pressure on the contractors themselves." A real estate industry insider said.

In addition, the bad end of the projects under construction this year, the quality risks or will increase, the standard reduction situation will become more and more serious. "The third- and fourth-tier cities in the Yangtze River Delta have sold very well in the past two years, and many leading developers have taken land at high prices, but now a large number of improved projects have been changed to rough delivery." The above-mentioned real estate industry insiders told First Finance.