China Real Estate Network News (Su Xiaowen).In 2023, "the relationship between supply and demand in the real estate market will undergo major changes", and the industry will be in a period of deep adjustment. With the continuous introduction of various measures conducive to restoring market confidence, it has also released more positive signals for the market. 2024 is coming, what opportunities and challenges will the real estate industry usher in in the new year?China Real Estate has sorted out six key words and looks forward to 2024 with you.
Stable regulation
The recent Politburo meeting and the economic work conference have made it clear that in 2024, we must adhere to the principle of seeking progress while maintaining stability, promoting stability with progress, and establishing first and then breaking down. As a pillar industry, the real estate industry plays an important role in stabilizing the economy, and is also an important starting point for stabilizing employment and ensuring people's livelihood.
At present, the real estate industry is in the midst of deep adjustment, and stable development is the top priority. In fact, under the general theme of "housing not speculation", in recent years, the management and local governments have continued to introduce a series of policy optimization measures to promote the steady and healthy development of the real estate industry. As far as 2023 is concerned, a number of policy tools have been introduced, such as "recognising housing without recognising loans", reducing the down payment ratio and interest rate, implementing individual income tax policies related to supporting residents to purchase housing, and reducing intermediary fees for second-hand housing sales, aiming to promote housing consumption, improve the efficiency of the housing market, and promote market stability.
The recently held National Conference on Housing and Urban-Rural Construction once again made it clear in the deployment of key tasks in 2024 that it is necessary to stabilize the real estate market, adhere to city-specific policies, one city, one policy, and precise policies, meet the demand for rigid and improved housing, optimize real estate policies, and continue to do a good job in ensuring the delivery of buildings, ensuring people's livelihood and ensuring stability. Judging from the statements of the high-level meeting, the real estate regulation in 2024 will continue the current tone, maintain a loose policy environment, and continue to optimize around the goal of meeting the demand for rigid and improved housing.
De-risk
The ** Financial Work Conference held in October 2023 still listed real estate as one of the key areas that need to be mitigated. The first economic work conference at the end of the year also reaffirmed that it is necessary to coordinate and resolve risks in real estate and other fields. The statements of the important meeting fully reflect the great importance attached to the prevention and resolution of real estate financial risks, and also show that de-risk is still one of the important tasks of the real estate industry in 2024.
To this end, the high-level meeting has repeatedly emphasized that it is necessary to meet the reasonable financing needs of real estate enterprises under different ownership systems without discrimination, and do not hesitate to lend, draw loans, or cut off loans for real estate enterprises that are operating normally. A number of ministries and commissions held a symposium to implement relevant measures, and a number of commercial banks followed up to increase support in development loans, mortgage loans, operating loans and bond underwriting, and it is expected that the relevant measures and implementation rules will be accelerated next year.
Regulators are drafting a "white list" of Chinese real estate developers, which may include 50 large-scale real estate companies, including state-owned and private-owned real estate companies. At the same time, the financial system put forward "three not less than" requirements, that is, the real estate growth rate of each bank itself is not lower than the average real estate growth rate of the banking industry;The growth rate of corporate loans to non-state-owned real estate enterprises shall not be lower than the growth rate of local real estate;The growth rate of individual mortgages for non-state-owned real estate enterprises shall not be lower than the growth rate of mortgages of the Bank.
In 2024, it is expected that the senior management will continue to implement the financial support policies for real estate enterprises, especially the measures such as "three not less than" and "white list of real estate enterprises" may be effective, alleviate the financial pressure of real estate enterprises, and steadily resolve risks in the real estate sector. For real estate enterprises, under the support of the reform of the financial system, it is also necessary to prevent and resolve risks by continuing to adjust the "three highs" model, realize standardized operation, control costs, ensure the removal rate, and make strategic adjustments in line with industry cycle changes.
New model
At present, the relationship between supply and demand in China's real estate market has undergone major changes, although the property market regulation and control policies are also being optimized and adjusted in a timely manner, but the general tone of regulation and control is to focus on the healthy and stable development of the entire industry.
The report of the 20th National Congress of the Communist Party of China proposed to "accelerate the establishment of a housing system with multi-subject supply, multi-channel security, and simultaneous rental and purchase", and the construction of rental housing was placed in an extremely important position. Since 2023, the company has repeatedly emphasized in important meetings the acceleration of the "three major projects" such as the construction of affordable housing, the construction of public infrastructure for both ordinary and emergency purposes, and the transformation of urban villages. The "three major projects" have also become an important starting point for solving industry problems and building a new model of real estate development.
Ni Hong, Minister of Housing and Urban-Rural Development, once said that it is necessary to build a new model of real estate development, establish a new mechanism for the linkage of "people, housing, land and money", improve the basic system of the whole life cycle of housing from development and construction to maintenance and use, implement the construction of the "three major projects", accelerate the solution of the housing problems of new citizens, young people and migrant workers, and make efforts to build good houses and create a new track in the housing field.
From this point of view, as the traditional residential development market continues to bottom out, it is an inevitable trend for real estate companies to transform from developers to service providers and from asset-heavy to asset-light. In 2024, including agent construction, urban renewal, affordable housing, long-term rental apartments, commercial investment and operation, etc., will also become an important choice for real estate companies to explore new models.
Adjustments
According to data from the National Bureau of Statistics, from January to November 2023, the national real estate development investment fell by 9 year-on-year4%, the sales area of commercial housing decreased by 8%, and the sales of commercial housing decreased by 52%, and the area of new housing starts fell by 212%, judging by these data, the real estate market is still in a correction.
In fact, no industry can always maintain high speed, and the real estate industry is no different. Looking ahead to 2024, the real estate market will continue to be in a period of full adjustment. In the future, as various departments and regions further deepen the implementation of relevant policies in the real estate field, the policy effect will continue to appear, and it is expected that the scale and level of property market transactions in 2024 will be close to that in 2023.
Specific to the urban market, there will be different adjustment rhythms between cities of different energy levels. The demand in first-tier cities is resilient and supportive, and sales will remain stable or slightly increase in 2024. The performance of second-tier cities will be differentiated, and the performance of some weak second-tier cities in terms of sales and ** may be weak. In third-tier cities and below, due to the weak fundamentals of the population industry and the greater pressure on inventory reduction, the policy stimulus has been blunted, and the market as a whole may maintain a leading trend.
On the other hand, under the downward pressure of the market, real estate development companies will also continue to adjust, and 2024 will still be a year of reshuffle and differentiation. Some central and state-owned enterprises can better resist risks and maintain stable performance during the market adjustment period by virtue of their capital, brand and background advantages. Small and medium-sized real estate enterprises need to seek survival and development through flexible market strategies and differentiated competition. For insuring real estate enterprises, it is necessary to take advantage of the current financial policy window to actively connect with financial institutions, properly dispose of assets, speed up debt clearance, actively market collection, and make every effort to ensure the delivery of buildings.
The changes in the general situation of the industry are also forcing enterprises to make strategic adjustments. In the period of market adjustment, precise investment is the most important investment strategy, and real estate companies will choose the best of the best in land acquisition, focusing on the core areas of core cities. At the same time, the adjustment of human capital, such as organizational strategy, organizational structure, salary performance, etc., will continue within real estate enterprises.
Innovation
For the real estate industry, scientific and technological innovation can not only improve product quality, but also promote cost reduction and efficiency increase to a certain extent.
Ni Hong, Minister of Housing and Urban-Rural Development, has previously proposed that the housing sector can learn from the automobile industry: in terms of design, it can empower housing with technology like smart carsBuild a house like a car;In terms of use, it is like a car to establish a house medical examination and insurance system;In terms of service, we do a good job in property service like a car 4S shop. The idea of "learning from cars" has broadened the industry's understanding of innovative development trends in the housing field.
The recent National Conference on Housing and Urban-Rural Construction also clearly proposed to strengthen the drive of science and technology, study the future-oriented good house construction technology, organize the construction of a new batch of key laboratories and engineering technology innovation centers and other scientific and technological innovation platforms, and accelerate the implementation of "digital housing and construction".
In terms of green development, since China clearly put forward the goal of "carbon peak by 2030 and carbon neutrality by 2060", the concept of green and low-carbon, energy conservation and environmental protection has gradually become the focus of attention of society and enterprises. As an important industry of the national economy and a major carbon emitter, the real estate industry is also committed to gradually transforming from traditional construction methods to low-carbon and sustainable development models. For a long time to come, the real estate industry will continue to promote green transformation.
Under the market adjustment, the marketing logic of real estate enterprises is also quietly changing, showing a trend of multi-channel simultaneous use and continuous innovation. In addition to the traditional marketing methods that rely on intermediary distribution channels, national marketing, and old with new, various means such as housing, trade-in, and live broadcast have all come out. These will be the direction that real estate companies are trying to layout, and more real estate companies will actively participate in 2024.
In addition, with the rapid development of science and technology, artificial intelligence will perform well in 2023, and some real estate companies have tried technologies such as digital employees and virtual anchors. Artificial intelligence-related technologies have also brought new thinking directions to the real estate industry, and perhaps in 2024, there will be a new experience of intelligence and digitalization in project advertising, real estate sales, property services and other links.
Product power
At present, China's housing development is entering the stage of "whether it is good or not" from "whether it is good or not", and "good house" is also a high-frequency word in the real estate industry in the past two years. The essence of "good house" is to start from the first end of infrastructure to meet the pursuit of quality life of different buyers.
In the past few years, real estate companies have been working to build a standardized system in order to facilitate the rapid promotion of their product lines in multiple cities and regions. However, this one-size-fits-all product strategy can only meet the residential needs of home buyers, and under the catalysis of the three-year epidemic, people's requirements for home work, life, and living quality have increased, and the satisfaction of personalized needs has also been raised to an unprecedented height.
At the same time, with the trend of younger and better home buyers, the demand for products is more diversified and personalized. Therefore, improving product strength and polishing differentiated and personalized products will become an important strategy for real estate companies to meet the needs of different buyers and break through the homogeneous competition in the industry.
In 2023, while adhering to steady operation, many real estate companies will shout the slogan of "quality delivery", constantly polish their products, fully consider the regional characteristics of different cities, understand the living habits of local customers, customize life scenes on demand, upgrade product lines, and provide products that meet different needs.
With the transformation of the industry to high-quality development, real estate has truly returned to the era of products. It has been the consensus of the industry to improve product strength and go through the cycle with productism. It is certain that in the new year, real estate companies will still focus on product polishing, improve product quality, and meet the needs of different buyers at different levels.