This is a problem buried in the hearts of many people. Some people say that the real estate industry in many places experienced a difficult time in 2021. Since the second half of the year, market expectations have changed due to factors such as the emergence of debt default risks of individual real estate head enterprises. The number of cities with falling house prices continues to increase, and buyers have a strong wait-and-see mood. The capital chain of some real estate enterprises is tight, and the land in many cities has been auctioned. Many employees even consider whether to continue to develop in this industry when enterprises reduce staff and pay. Will the real estate industry get better? To answer this question, we need to consider the changes and invariance of the industry.
What hasn’t changed? The status of the pillar industry of real estate has not changed. According to the National Bureau of Statistics, the real estate industry will account for 7.2% of GDP in 2020. If we measure the comprehensive impact of the real estate industry on the national economy, then this proportion is much higher. The real estate industry is an important part of the national economy, which has an important impact on production, investment and consumption. At the same time, the real estate industry is also closely related to people’s lives, and it is related to people’s living and happiness. The real estate industry is large in scale, long in chain, and involves a wide range. It occupies a fairly high share in the national economy, fixed assets investment of the whole society, local fiscal revenue, and total loans of financial institutions, and has an important systematic impact on economic and financial stability and risk prevention.
The fundamentals of the real estate market have not changed. Housing demand is still strong: look at the rigid demand for housing. At present, the urbanization rate of permanent residents in China is 63.9%, which is still in the stage of rapid urbanization. Every year, more than 11 million people are newly employed in cities and towns, which brings a lot of new housing demand. Second, look at the housing improvement demand. A large number of old houses built before 2000 are small in area, poor in quality and incomplete in supporting facilities, and the demand for residents to improve their living conditions is relatively strong.
The above two "invariants" show that the position and role of the real estate industry in the national economy are very important. To achieve a stable word, strive for progress and smooth the national economic cycle, it needs a virtuous circle and healthy development of the real estate industry. At the same time, the housing demand corresponding to China’s current development stage can still play an important supporting role for the future development of the real estate industry. In this sense, the real estate industry needs to be "better" or "better".
However, the connotation of "getting better" has changed. Since the real estate market reform, it has experienced several ups and downs. At present, the market differentiation among different cities is very obvious. First-tier hot cities are still facing the pressure of excessively high housing prices. Some cities are affected by multiple factors such as population outflow and economic development difficulties. The downward pressure on the real estate market has increased, and the debt risks of some real estate enterprises that relied on blind expansion of high debt in the early stage have increased. Therefore, it has become the primary task and the basis for the real estate market to "get better" to take measures to reverse the current problem of poor circulation in the real estate sector, achieve a virtuous circle and healthy development, resolutely and effectively handle the risks of overdue delivery of real estate projects of individual head housing enterprises, and realize "ensuring the delivery of buildings, people’s livelihood and stability".
In the face of market differentiation, real estate regulation should be based on the city’s policy, which not only inhibits the real estate bubble, but also prevents ups and downs. It is worth noting that when the market gets better, it should not take the old road of over-reliance on real estate, and it is necessary to avoid some cities’ housing prices from entering the fast upward channel again. The bottom line of "housing and not speculation" should not be broken, and speculation in real estate should not be repeated. It is the real connotation of "good" to realize the stable and healthy development of the real estate industry by constantly improving the long-term mechanism of real estate.
The real estate development and operation mode of "high debt, high leverage and high turnover" formed in the past is unsustainable. After this round of market adjustment, many problems have been exposed. Market participants should be more rational and learn from the debt crisis and liquidity risk of individual housing enterprises. Reducing the leverage level and controlling the debt ratio within a reasonable range should be the active choice and long-term persistence of housing enterprises.
The rapid development of the industry in the past 20 years has provided a large amount of housing supply, which basically solved the problem of "whether there is". However, there are still a few high-quality, exquisite and high-quality commercial housing left behind. Therefore, under the background that the housing demand is still strong in the future, we should not only solve the problem of quantity, but also further solve the problem of "good". The change of the situation makes enterprises need to seriously think about the future road, from pursuing scale to paying more attention to quality change, conforming to the direction of green development and digital upgrading, and from providing the same commodity housing to renting housing, urban renewal and renovation of old residential areas, aging housing and other directions, which may become new choices for enterprises, which will also provide a broader space for the high-quality development of the industry.
Recently, the relevant financial authorities put forward measures such as "better meeting the reasonable housing needs of buyers" and "doing a good job in financial services for mergers and acquisitions of risk disposal projects of key real estate enterprises", which can be described as frequent policy enthusiasm for the real estate industry. Although it may take time for practitioners, property buyers, suppliers, financial institutions and other parties to regain their confidence, with the gradual implementation of policies and the gradual improvement of the long-term mechanism of real estate, a virtuous circle and healthy development of the real estate industry will be realized. (This article Source: Economic Daily Author: Kang Shu)
(Editor: Nian Wei)
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