The Real Estate Industry Should Follow the Trend and Accelerate Transformation
2023-03-20
Recently, the market for new and second-hand housing in multiple places has shown signs of recovery. According to data from the National Bureau of Statistics, in February 2023, the number of cities with a year-on-year increase in the sales price of commercial housing in 70 large and medium-sized cities continued to increase, and the sales price of commercial housing in all tier 1 cities increased overall. The sales price of commercial housing in tier 1 cities increased year-on-year, while the year-on-year decline in tier 2 and tier 3 cities narrowed. In 2022, the sales area of newly built commercial housing in China was about 1.4 billion square meters, and the sales volume was about 14 trillion yuan. The housing price remained relatively stable. Although the annual sales area has decreased compared to 1.7 billion square meters in the previous five years, it is still a good achievement under complex circumstances. Recently, the Party Central Committee proposed optimization policies to support rigid and improving demand for real estate, prevent financial risks, and support financing for real estate enterprises. Local governments have successively adjusted purchase, price, and loan restriction policies, and optimized various policies such as relevant taxes and land auction conditions. From the current perspective, the policy effect is gradually emerging, and the housing demand is constantly releasing. The Central Economic Work Conference proposed to prevent systemic risks caused by the real estate industry; We should adhere to the positioning that houses are used for living, not for speculation, conduct in-depth research and judgment on major trends and structural changes in the real estate market, such as the supply and demand relationship and the urbanization pattern. We should promptly study medium - and long-term root causes, eliminate the drawbacks of the "high debt, high leverage, and high turnover" development model over the years, and promote the smooth transition of the real estate industry to a new development model. This requirement has a very long-term strategic guiding significance for the real estate industry to adapt to the new situation of China's population and economic and social development, and to meet the needs of the people. From the perspective of long-term trends in the real estate market, there is still room for development to meet the demand for rigid and improved housing, and attention should be paid to the risks of overcapacity and market fluctuations. According to the seventh national population census, in 2020, the per capita housing construction area of urban households in China was 38.62 square meters, and the total housing construction area of urban households was about 30 billion square meters. Referring to the average level of developed countries, based on the calculation that the per capita housing construction area of urban households in China will reach about 50 square meters in 2050, the housing construction area of urban households in China will reach about 50 billion square meters, with about 20 billion square meters of development space remaining. However, from 2011 to 2020, China's commercial residential sales area accumulated 12.6 billion square meters. Based on the average annual sales area of 1.3 billion square meters in these 10 years, the gap can be filled in about 15 years, and the existing housing construction industry and real estate development industry will experience overcapacity. As the relationship between supply and demand changes, fluctuations in housing prices and regional differentiation will become more evident. In the face of the above situation, it is necessary to take multiple measures to promote the stable and healthy development of the real estate market. On the one hand, give full play to the role of market mechanisms, and the government should implement policies based on urban and precise policies to further eliminate unreasonable consumption restrictions in key areas of domestic demand such as real estate, optimize purchase and price limit and loan limit policies, reduce taxes, down payments, and loan interest rates to support rigid and improved housing demand. Land supply and administrative approval should be optimized to support reasonable investment and financing needs and normal production and operation of real estate enterprises, Support enterprises to develop high-quality products and services, and implement the government
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：economic dairy
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