We must admit that the current economy is a bit difficult, domestic demand cannot be pulled, and exports cannot be relied on. Overall, 2023 has been a bit dull and a bit difficult. Therefore, there are always some voices on the Internet, expecting the state to introduce real estate rescue policies, reduce the proportion of down payments, reduce mortgage interest rates, and relax purchase restrictions, always hoping that real estate can re-provoke the beam and stimulate economic growth.
But I had to pour cold water on this part of the population. The glorious era of real estate has come to an end and has become a history that cannot be read back. There is some basis for saying this, and there are two of the most iconic events in the real estate sector this year. First, on September 28, 2023, Xu Jiayin, chairman of the board of directors of Evergrande Group, was taken away by relevant departments. This is a major event for Evergrande Group itself, but also for China's real estate sector. Second, on December 6, 2023, Wang Jianlin of Wanda Group transferred 51% of the equity of Wanda Film, the most profitable and core asset, to Shanghai Ruyi Investment Management*** Although Wanda Group did not have a direct accident like Evergrande Group, Wanda Group was also rumored to be heavily indebted, swaying and crumbling in the wind and rain. Evergrande Group and Wanda Group are the most iconic leading enterprises in the real estate field, and in addition to the difficulties encountered by these two companies, there are other companies in the real estate field that have also encountered similar difficulties. The rapid development of companies and enterprises in the real estate field is created by the times, and the difficulties and problems encountered are also due to the background of the times. As the saying goes, success is also Xiao He, and defeat is also Xiao He.
These are the two most iconic indicators of the surface. In fact, with a more rational analysis, we would have come to a similar conclusion. From the perspective of China's demographic structure and market demand, the post-70s and post-80s generations have basically bought a house, not to mention 90%, at least 80% have already bought a house or built a house. After the 90s, some have already bought it, some parents have helped buy it, and some even have several sets. Let's not talk about the post-00s, some are still studying, but they basically don't worry about the house to live in, parents, grandparents, grandparents, basically have a house. And then on, as we all know, the birth rate dropped dramatically. The existing stock is enough for them to live in, and for most people, housing and buying a house will definitely not become the focus of their family income and expenditure. Of course, there are still some people who will consider improving housing, but it will not become the mainstream and the main force. Therefore, it is just wishful thinking to make real estate the backbone of the national economy again.
Further, the development experience of developed countries also tells us that economic development is regular, real estate development is phased, and it is impossible to prosper and develop all the time. This is true in the United States, Japan, Europe, and Hong Kong.
With this sober understanding and conclusion, it will be easy to do. At present, our greatest expectation and hope for the real estate industry is stability. Because the proportion of real estate in the national economy was too large, it was the pillar of the national economy, and the economic correlation was also very strong. Moreover, the asset of most families is the house, and once the house depreciates, it will return to the pre-liberation period overnight. Therefore, no matter from the perspective of the first class or from the perspective of the people, we hope that the real estate will be stabilized, and time will be exchanged for space, and the problems in this will be slowly solved. At the same time, while stabilizing the real estate industry, cultivate new growth points.
On December 8, the Politburo held a meeting to set a basic tone for economic work in 2024. It is clearly stated that to promote stability by progress, first establish and then break, there should be this meaning in it.
Real estate can no longer be counted on, stop thinking about real estate, we must be determined to find a new way.
First, we must make up our minds to speed up innovation and put it to the end of life. Accelerate technological innovation and product innovation, and drive consumption through innovationOnly through innovation can we compete in the world market and realize the value of labor. This is also one of the meanings of the supply-side reform that we often mention. Only innovation can seize the high end of the value chain, the economy can find a way out, and only innovation can there be hope for the future. Therefore, this ** Politburo meeting particularly emphasized the need for self-reliance and self-improvement in science and technology, which is also the meaning.
Second, it is necessary to optimize the distribution of social wealth and earnestly enhance residents' spending power. Exports are unreliable, and real estate is no longer reliable. So, how to pull domestic demand?A new focus must be found. Increasing investment and promoting consumption are the two major levers for stimulating domestic demand. From the perspective of consumption alone, of course, ordinary people are willing to consume, but the key is to have money. There is no money in your pocket, and no matter how much you shout to promote consumption, it will be empty. After so many years of development, the society is rich, especially the bank deposit and savings rate are rising. However, most of us feel that we have no money, and the money is goneThe money is in the bank, in the hands of a few. For example, many rich people, he makes a lot of money, in addition to living expenses, he has a lot of money, some hundreds of millions, some tens of millions. Now there are few investment opportunities, and he can only leave it in the bank. There are also some people who may have made money in China, and their families have emigrated abroad, and the money has also been transferred abroad. There is also a part. I won't go into details. In short, the money is in the hands of a small number of people, and most people have no money. Then, under the framework of the existing economic and social order, how to optimize the distribution of wealth and guide the rich to use money is very crucial. For example, find a way to guide them to invest, find a way to guide them to do charity, and use the money earned from society for society. You have to use and move the money to live. This ** Politburo meeting also specifically mentioned the need to focus on expanding domestic demand, optimizing the structure, and boosting confidence, which should also have this meaning.
The third is to insist on housing not speculation, and publicly announce the return of real estate to the normal track. That is to say, it is necessary to be firm and clear, the house is only to live in, not to speculate, and to return to the residential attributes. Don't have the expectation that house prices will fall or **, don't wait and see, buy a house that should be bought, sell a house that should be sold, and promote the real estate market to return to rationality. Just like the previous home appliance market, it has become a mature and stable market, relying on normal market forces to promote real estate development. In this way, the whole real estate will remain generally stable.
All in all, the era of real estate has come to an end, and don't expect real estate to drive the national economy. We must make up our minds to engage in innovation, research and development, and marketingIt is necessary to make up our minds to promote reform in the social field, to promote a more scientific and rational distribution of social wealth, and to enable the common people to have support for their old age, medical treatment for their illnesses, education and education, and money in their hands and willingness to spend money.