**: NetEase Finance Think Tank.
The 2024 NetEase Economists Annual Meeting, co-sponsored by the China Enterprise Reform and Development Research Association, NetEase Finance, and NetEase Finance Think Tank, was held in Beijing in November.
InFamous economist Ma GuangyuanIt seems that the status of real estate as a pillar industry will not change, and people's demand for better living conditions will not change. Real estate is currently entering a "new cycle", and macro policies need to be patient to solve the current problems and explore new models.
Ma Guangyuan also pointed out that in the process of establishing a new real estate model, we must be soberly aware that the problem of real estate in the past many years is not marketization, but the lack of marketization, such as insufficient land leads to too high land, too high land and high housing prices. Nowadays, many people talk about the model of Chinese real estate and say that they want to learn from Singapore, but it is not practical. In so many countries in the world, the housing system is completely different, and each country has its own national conditions and methods, and it is impossible for China to learn from Singapore.
The following is a transcript of the speech:
Real estate is a big industry, and clothing, food, housing, and transportation are one of the most basic needs of a person, so I thinkThere is nothing wrong with developing the real estate industry.
I would like to talk about what economics is in combination with the changes in real estate policies and the changes in the industry in recent years, including the risks faced by real estate nowWhat is economic policy?What should I do to prevent risks?
Economics really can't be called science so far, because economics can't do a lot of things, and everyone has a lot of opinions, it's a mess, economists I think it may be the least consensus among all disciplines, 10 economists you ask, there are almost more than 10 views, especially on real estate issues.
I thinkThe first consensus is that the economy itself needs to be recycled. It is particularly important to circulate, that is, the chain of the economic cycle cannot be interrupted casually, once interrupted, there will be problems, this is called the economic cycle, every time there is a major global financial crisis, why should the central bank decisively input liquidity?It is to interrupt the cycle, and we now look at the problem of real estate
Second, there should be long-term expectations for economic development. Economists who study long-term expectations have won the Nobel Prize in economics, long-term expectations are very important, for the industry, for the economic development of a country, there can be no long-term investment without long-term expectations, and there can be no long-term development without long-term investment, which is basic common sense.
Third, be patient. We must be patient in everything we do, and in the long-term development of China's economy, everyone can see that there are no major problems when there is patience.
In the process of solving real estate, our patience has gone to the **I would like to ask, the real estate market has been in the market for more than 20 years, of course, it has accumulated a lot of problems, and it takes time to solve these problemsI think there's something wrong with patience, and I'm going to talk about my thoughts on these three issues.
First, back to a basic common sense, real estate is an industry, the same as manufacturing, I don't think the industry has any high morals and low morals, don't evaluate an industry at the moral level, is it very moral to do manufacturing?Is it low to do real estate?No.
Returning to the industry itself, let's look at what the relationship between real estate and China's economy is. It is indeed a barometer, and it is inseparable from it, and whether we have a good relationship or a bad relationship, at least today, it is important.
My first conclusion is that it is very important to stabilize real estate, real estate can be said to reflect all aspects of sentiment, reflecting a certain long-term expectation, such as consumption, consumption to rise, if you go to see, what do we rely on to stimulate consumption?I think it's important to consume in bulk, and we need to learn from the experience and lessons of every time we have done it right and what we did wrong.
How will the real estate market go this year?Economic development should have long-term expectations, industrial development should have long-term expectations, and now the biggest problem of real estate is in the worldThere is no long-term expectation, and the long-term development of this industry is in the first placeThis needs to be made clear.
Second, what is a new cycle?According to the cycle of real estate, the normal cycle of real estate is 18-20 years, and we have market-oriented reform from 1998 to 2018, in fact, the big cycle has basically arrived, if you say this in 2020, right?Still, there has been a significant change in the supply and demand relationship in the real estate market, and this change means: (1) there was a structural shortage of houses in the past;(2) No one invests in real estate;(3) From quantity to quality;(4) Say goodbye to unilateral **;5) You don't have to buy a house, we have talked about renting and selling for many years, and now the market pushes to do this, for example, many young people if they don't have a house, they were forced to buy in the past, and the money of several generations got a piece to buy, now it's not necessary, I rent a house for a lifetime Maybe it's the most cost-effective, this is a result of marketization.
What does this new cycle look like?I think it's all aspects, if we talk about the new cycle of real estate, it also means the high-quality development of real estate itself, how is this high-quality development promoted?It's completely market-driven, and I'll make a few misconceptions.
First, the real estate ceiling has indeed arrived, and the supply and demand relationship in the real estate market has undergone major changesThis is the ceiling of the industry itself, what is the ceiling?In 2018, I came up with a concept called "two 18s", what does it mean?I think that the ceiling of China's real estate market is to sell 1.8 billion square meters of houses every year, with sales of 18 trillion yuanThey think that China's urbanization is not completed, and the growth may be slower in the future, but it will continue to grow, and I think there is a ceiling, and this ceiling will come in 2021, and when you look at 2021, the sales area will be close to 1.8 billion square meters, and the sales will be 18 trillion yuan, and it will be even lower in 2022.
This is also consistent with my calculations, I was talking about it a few years ago, and I said why do you think there is 1.8 billion?I made a calculation, I think that by 2024, our annual demand will fall below 1 billion, and the ceiling of the market has actually arrived, which also means that the era of real estate wealth creation is over.
Judging from the data, do we still need to develop real estate?Let's look at the structure, where does the structure manifest itself?Our per capita construction area, in 2020, we are a little more than 36 square meters, plus a little more than 41 square meters in rural areas, if the public share is removed, less than 30 square meters, what does it mean?It did not reach the food and clothing line, and the food and clothing line was almost 45 square meters, which means that there was still space, but this space was structural.
Second, where does the structure manifest itself?A large number of houses are old houses, before 2000, why do I talk about before 2000?Because the first batch of market-oriented houses in 1998, as early as 2000 years later, two-thirds of the houses are basically old and dilapidated before 2000, some of these old and dilapidated houses have to be demolished, and some of them can be upgraded, but a considerable part of them are not demolished due to the internal concealed projects, hydropower projects, etc., you don't think that installing an elevator seems to have become new, and there are other hidden dangers that cannot be solved, which means that if two-thirds of the houses are removed, the houses are in short supply.
I have also done one thing in the past few years, to calculate how many houses there are in China, using two methods, the first is according to the annual completed area and the number of units, 2000-2021 11.9 billion sets, how much was before 2000, is 25.7 billion units, how many small property rights are there, almost 70 million to 75 million units, 45.1 billion units, which means that if the average household size is calculated by 3 people, the urbanization level of houses must be enough, but everyone remember that I said two-thirds, how many?2.5.7 billion sets are old houses, this algorithm and I went to each province, according to the data of each province to calculate although there is a gap, but the conclusion is almost the same, so we want to talk about China's good houses are too few, the intelligent level of the house is very low in the world, the level of furniture intelligence is also very low, even if it is doors and windows, now we talk about "double carbon", China's many building energy consumption through what is gone?Go through the doors and windows.
I'll make a suggestion, you can do a big thing by replacing the doors and windows, turning ordinary doors and windows into energy-saving doors and windows, and everyone will see how much energy consumption is savedThis can be done, the new cycle of real estate does not mean that real estate has nothing to do, I get three conclusions: 1. The status of real estate as a pillar industry will not change, the United States is still a pillar industry, an important macroeconomic indicator of the United States is the number of houses built and sold every year, and real estate is still in the top three in a single industry in the United States;2. The people's investment in real estate may not change in the short term, after all, they are still invested in it;3. The need for better living conditions will not change.
Finally, I would like to talk about the new modelIn the process of establishing a new model, we must be soberly aware that the problem of real estate in the past many years is not marketization, but the lack of marketizationFor example, land, land is insufficient, resulting in too high land, too high land, and housing prices are bound to be high, which is a basic law, which is no way, so the construction of this system must not be market-oriented.
For the future development of the real estate industry, the new model of real estate first means the withdrawal of macroeconomic control policies, real estate regulation and control must be fully withdrawn, do not hesitate, now many places to engage in purchase restrictions are unnecessary, should quickly turn to the construction of the system.
One last suggestion,Be patient, don't rush to solve real estate problems.
How do we solve the problem of real estate, we have more than 40 years of market economy, in fact, I think we still need to make up lessons in dealing with corporate risks and industry risks, and we have not learned how to deal with risks.
What is the first step in making up the lesson?To be patient, the most important thing in macroeconomic policy is patience, patience is great wisdom, the development of the economy needs patience, the resolution of risks requires patience, we just need patience. I want to tell you that I have calculated the U.S. economy, starting in 1821, with an average annual growth rate of 3 per year over a period of 200 years3%, the average annual growth rate of the U.S. economy in 200 years is only 33%, and today it has become the world's largest power. Therefore, we don't need to be so fast, I think as long as China keeps the risk, adheres to the general direction of marketization, and gives everyone long-term expectations at the policy level, China's economy is not bad, I don't think there is much need to worry, take real estate as a sample to summarize the gains and losses of macro policies, which is more important at the moment.