At present, real estate has entered a new stage of total stability and regional differentiation, and is gradually transitioning to a new model. In the short term, the market will stabilize and rebound;In the long run, there is still solid support for sustainable development in the future. How big is the demand for real estate?Can it be activated effectively?
year, it is expected that real estate sales will gradually stabilize, and the annual commercial housing sales area will be 11900 million square meters, a year-on-year increase of 02%。There are two core variables that affect demand: first, the construction of three major projects such as urban villages;Second, the city's policies will continue to be optimized to ensure the smooth release of demand. The core beneficiaries of the two variables are mainly 35 cities, including 21 megacities with a permanent urban population of more than 5 million and 14 large cities with 3 million to 5 million people. They have a total permanent population of 400 million, and in 2022, the total area of commercial housing sales, land transfer fees, and total GDP accounted for the country's total3%, which is the main supporting force for future real estate sales.
In first-tier cities, the sales area is expected to be 58.23 million square meters in 2024, a year-on-year increase of 233%, accounting for 49%。First-tier cities have large populations, mature industrial development and strong demand. First, the rigid need exists for a long time. Due to its strong economic strength, many job opportunities, perfect urban supporting facilities, and abundant medical and educational resources, it is highly attractive for talents to buy houses and settle down. In 2022, the population of first-tier cities accounted for about 5 percent of the country's total population9%, but the total GDP accounts for 122%。The second is to improve the centralized release of demand。On the demand side, with the adjustment of the criteria for the identification of the first house, the chain of "selling one and buying one" has been restarted. On the supply side, urban villages have released high-quality land plots, and the delivery of off-plan housing on schedule is highly guaranteed, and the demand for improvement will be met to a greater extent in the future. Third, new demand can be expected. In the early stage, in the context of the significant relaxation of policies in other cities across the country, the first-tier cities as a whole maintained a certain degree of restraint and left enough policy space for the future, such as adjusting and optimizing the purchase restriction area, reducing the down payment ratio, lowering the interest rate, etc., and the sales of commercial housing will benefit under the care of the policy.
In second-tier cities, the sales area is expected to be 402.84 million square meters in 2024, a year-on-year increase of 219%, accounting for 339%。The demand of second-tier cities mainly comes from three aspects. The first is the demand for inter-city population flow, such as the population of the surrounding third- and fourth-tier cities flowing into the demand for buying houses in second-tier cities. According to the statistics of Qipu, the city-to-city floating population in 2020 reached 82 million, an increase of 35 million from 2010. The second is the demand for housing in surrounding towns, such as the needs of rural residents who are relatively backward in the surrounding infrastructure construction to buy houses in the city. In 2022, the urbanization rate of China's permanent population will be 65According to United Nations data, by 2030, it is expected that an average of 11 million rural people will still be converted into urban permanent residents in the future, which will generate a large demand for housing purchases. The third is the demand for young people to return to their hometowns to buy homes。Some second-tier cities are not as stressful as those in the first-tier cities, but there is still a lot of room for industrial development, and they are closer to their hometowns, making them more and more attractive to young people.
In third- and fourth-tier cities, the sales area is expected to be 726.4 million square meters in 2024, a year-on-year decrease of 100%, accounting for 612%。In third- and fourth-tier cities, the sales area has increased significantly in the past, and the proportion has increased significantly, mainly because of the demand created by the monetization of shantytown reform. In the future, the proportion will gradually return to the normal level before the shed reform. The demand group is also mainly supported by local and returning home buyers. Specifically:
The demand for the third and fourth lines mainly comes from four aspects. The first is the housing demand of local residents, including the demand for the quality of housing consumption, the upgrading of consumption area, and the need for marriage and childbirth. The second is the demand for migrant workers to buy homes, including the needs of people who have been working, settling in the local area for a long time, buying a house and marrying in the local area. The third is the demand for returning to the hometown to buy a home。For some young people, the experience of living and working in third- and fourth-tier cities is better. As the real estate market stabilizes, the demand for homeownership will continue to be released, and even some young people will choose to buy local properties first as an asset allocation. Fourth, the demand for housing in the surrounding towns and villages, including the demand for residents in the surrounding towns and towns with low quality of medical care and education to buy houses in the city and rural marriage in the city. It should be noted that the market differentiation of third- and fourth-tier cities is also increasing, and the population of third- and fourth-tier cities in developed urban agglomerations still has an inflow, but not in urban agglomerations, the central and western regions of metropolitan areas, northeast and other areas lacking core cities, the population of third- and fourth-tier cities continues to have a large net outflow, and the market outlook is facing certain pressure.
It is worth noting that in the past, the national sales driver was the demand of the third and fourth tiers, and in the future, it will be the first and second tiers, mainly because of the release of high-quality land plots in urban villages.
The transformation of urban villages not only adjusts and optimizes the supply and demand structure, but also the supply-side reform of real estate in the true sense. After years of development, the available land plots in the core areas of the city have decreased sharply, especially in the first and second-tier cities, where there is a lack of land in the core areas**. Beijing, Shanghai, Shenzhen, Guangzhou and other urban core areas of residential land is very scarce, land ** suburbanization, but a large number of buyers of the housing demand, renters to rent the core area of the return to the urban core area, resulting in the contradiction of housing supply and demand mismatch in big cities. The transformation of urban villages can re-release the land in the core area of the city, and on this basis, build modern buildings with complete functions to meet the needs of multiple parties.
Urban villages can effectively drive real estate sales. According to our estimates, urban villages will drive sales in 5 years2-14.400 million square meters;Among them, the sales pull range in 2024 is 83.07 million square meters - 2900 million square meters. This paper assumes that 100 million square meters will actually be pulled in 2024. Assuming that the average transformation period is 5 years from 2023 to 2027, the calculation range is 35 cities, including 21 megacities with a permanent urban population of more than 5 million and 14 large cities with 3 million to 5 million people. Under the optimistic scenario, it is generally expected that the transformation of urban villages will boost sales by 14 during the five-year transformation period400 million square meters, of which 2 will be pulled in 2024900 million square meters. The optimistic scenario assumes that the demolition area accounts for 50%, 70% of the house ticket resettlement (assuming that the resettlement compensation per capita is 60 square meters, and the pure monetized resettlement (assuming that the monetized resettlement part has a 70% commercial housing purchase rate and an average purchase area of 40 square meters per capita), and the new residential plot ratio of the renovated plot is three times the original. Under the cautious scenario, it is expected to boost residential sales by 4200 million square meters, of which 83.07 million square meters will be driven in 2024. The prudent scenario assumes that 20% of the area will be demolished, and the plot ratio of new residential buildings on the renovated plot will be twice the original one, and the rest of the assumptions are the same as the optimistic scenario. In addition, the pace of urban village transformation is expected to show typical nonlinear characteristics, assuming that the proportion of the transformation area in 5 years is %.
There is still solid support for the sustainable development of China's real estate market in the future. According to us**, the demand center is expected to be 11. per year in 2023-20276.4 billion square meters. Six factors are driving the demand for housing in the medium and long term. First, the level of urbanization has been steadily improved, and the rural population has continued to move to the cities. In 2022, the urbanization rate of China's permanent population will be 652%, equivalent to the United Kingdom around 1870, Germany around 1913, the United States around 1947, and Japan around 1961, has huge growth potential. Second, the trend of inter-city population mobility has intensified. Regionally, the population continues to concentrate from the central and western regions to the east. From the perspective of economic development, the Yangtze River Delta, the Pearl River Delta, and the Chengdu-Chongqing urban agglomeration have increased their agglomeration, and the agglomeration economy has become the core driving force of contemporary urban development. Third, housing consumption is upgraded. The first is regional upgrading. The cities are upgraded from small and medium-sized towns to core cities and urban agglomerations in the region, and from old houses in old areas to new houses in new areas. Second, the per capita housing area has expanded. According to the 2020 Qipu data, the per capita housing construction area in China's cities and towns is 386 square meters, compared with the international still has room for improvement. Fourth, living conditions have improved. There is still room for improvement in housing quality, housing function, infrastructure and living environment in China, and it is still a weak link in energy conservation and environmental protection and community services. According to the 2020 census, the complete housing rate in China's cities is 95Nine per cent, about 29 per cent are bungalows in poor condition, and 35 per cent were built before 1999. Fifth, economic growth has driven residents' housing consumption. In 2022, China's per capita GDP will be 12,720 US dollars, and the gap between the per capita GDP of China and the United States will narrow from 67 times in 1978 to 6 times in 2022. Sixth, the family structure has changed and the scale has become smaller. In 2022, the average number of households in China will be 276, a decrease of 048 households, and 2 in Europe4. In comparison, there is room for further miniaturization of family size in China. This is mainly due to the decline in the marriage rate, the increase in the divorce rate, and the increase in the proportion of first-generation households.
Risk Warning:
1) The market fell more than expected, resulting in land transactions and commercial housing sales falling short of expectations
2) The policy is less than expected;
3) The calculation results cannot reflect the whole picture of the market, and the calculation results are limited by the amount of data, which may lead to the results not reflecting the whole picture of the market
4) Different national conditions, the limitations of the conclusions in the country comparison, different policies adopted by different countries, different national conditions, and therefore different market trends;
5) The sample of market research data is limited, which will lead to a certain gap between the relevant results and the overall market picture.
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**Research Report: "How to Go in the Real Estate Market in 2024 - Demand".
Release date: December 21, 2023
Issuing agency: Guohai **shares***
Analyst of this report: Xia Lei
sacID: S0350521090004