After a long period of downturn, China's real estate market seems to be difficult to reverse the current decline. According to the data, in the first 10 months of this year, the sales area of commercial housing fell by 22 percent year-on-year3%, and the second-hand housing sales situation is becoming more and more severe. The number of second-hand housing listings in first-tier cities even increased by 25% in early September. In addition, the average sales price of commercial housing across the country has also declined, with the average price in October falling by 17% from its peak in April this year. In this case, industry insiders said that if the real estate market cannot be reversed, then from 2024, the country may usher in three major changes. Let's take a look at these shifts.
Transformation 1: Accelerate the adjustment of industrial structure. Once the adjustment trend of the real estate market is difficult to reverse, China is likely to speed up the adjustment of the industrial structure and gradually shift from over-reliance on the real estate industry to high-end manufacturing and high-tech fields. Looking back at the 90s of the last century, after the bursting of the real estate bubble, Japan quickly turned to the animation industry, the new materials industry and the automobile industry, which became pillar industries. China will also gradually reduce its dependence on real estate and look for new breakthroughs in high-end manufacturing and high-tech fields. In fact, it is not sustainable to rely solely on real estate to drive rapid economic growth.
Expansion: Industrial restructuring can not only improve the sustainable development capacity of the economy, but also help promote technological innovation and industrial upgrading. The development of high-end manufacturing and high-tech fields will bring new growth points to China's economy and improve the country's competitiveness and innovation capabilities. In addition, it will also promote the upgrading of the skills of the workforce and the increase of employment opportunities, thereby improving the living standards and happiness index of the people.
Change 2: Accelerate the pace of affordable housing entering the market. Recently, China's high-level has announced that it will launch a new round of housing reform, that is, to accelerate the pace of affordable housing into the market. In the next five years, 6 million affordable housing units will be rolled out and piloted in 35 cities with populations of more than 3 million. This means that affluent people can buy commercial housing, while low- and middle-income people can apply to buy affordable housing to meet the housing needs of different groups. In the future, the market will determine the market and will no longer intervene. It is worth mentioning that the ** of affordable housing will be much lower than that of nearby commercial housing, and the affordable housing cannot enter the commercial housing market for trading.
Expansion: Speeding up the construction of affordable housing is of great significance to solving the housing problem of residents and realizing that residents can live and work in peace and contentment. The implementation of the affordable housing policy can not only improve the living conditions of low-income groups and narrow the gap between the rich and the poor in society, but also stabilize the real estate market and avoid over-investment and housing price bubbles. At the same time, the introduction of affordable housing will also bring more demand to the real estate market, stimulate economic development and increase employment opportunities.
Transformation 3: Accelerate the pace of property tax reform. Property tax reform is getting closer. As early as October 2021, China's top management announced that it would expand the scope of pilot cities for the introduction of property tax. According to experts, once the domestic economy improves, property tax reform will accelerate. The introduction of real estate tax can not only curb the demand for investment and speculation, reduce the vacancy rate of housing, but also open up new tax sources for local governments and increase local fiscal revenue in the case of reduced land fiscal revenue. It is expected that in the future, the cost of owning a home for families with more than two properties will increase.
Expansion: The introduction of property tax will promote the healthy development of the real estate market, reduce the phenomenon of investment in real estate speculation, and curb the excessive housing prices**. At the same time, the collection of property tax can also provide important fiscal revenue for the local government, which can be used to improve public services and infrastructure construction, and improve the overall competitiveness of the city. In addition, the reform of the property tax can also promote the return of idle properties to the market, alleviate the housing shortage problem, and provide a good living environment for more people.
Starting from 2024, if the trend of real estate market adjustment cannot be reversed, China will usher in three major changes: accelerating the adjustment of industrial structure, accelerating the pace of affordable housing entering the market, and accelerating the pace of real estate tax reform. These reform measures will gradually move away from dependence on the real estate industry and promote sustainable economic development. At the same time, they can also meet the housing needs of different groups, improve people's living standards, and provide new fiscal revenue for local governments. In the face of the current adjustment of the real estate market, we should actively embrace new changes and inject new vitality into the sustainable development of the domestic real estate industry.