We are in the middle of an abyss of the world economy, after three years of the pandemic that has been tormenting us.
During this period, real estate was once again pushed to the forefront. As the vane of the mainland property market, Shanghai has about a quarter of the second-hand houses in the market, and some have even fallen to one-third. In stark contrast, Shanghai, which has a fairly high level of economic development, may be on the verge of collapse in the real estate markets of other cities.
So,What is it about the property market that makes it so heavy? As an important domestic industry, real estate accounts for 30% of GDP, and such an important position will lead to its future direction
The pandemic has dealt a major blow to the global economy, and countries have implemented policies to provide benefits to withstand economic shocks.
However, in our country, the main "welfare" is still only a few loan products, and there is still a certain amount of stimulus in 2020. After January 2021, it was no longer able to give much substantive help to the people. Entering 2022, the embarrassing situation faced by the people is almost indescribable.
In the past three years, it seems that we have not provided enough transfers or other benefits to the people. As the cost of living continues to rise, people's savings have to be consumed in the maintenance of daily life.
After the lockdown was lifted, it was clear that demand that had been delayed due to the pandemic was partially released in the first quarter.
However, with the arrival of the second quarter, the growth rate of aggregate demand in the market also began to decline due to the reduction of the people's savings rate.
The down payment and monthly payment required to buy a house have to bear the pressure of this reduction, which makes it even more difficult. There is even a strange phenomenon in some cities that give free housing to renew the mortgage!
In essence, we do not have enough purchasing power to return to households and private enterprises.
After the lockdown was lifted, natural demand fell like a cliff.
Nowadays, if you need to further squeeze out more purchasing power to promote new home purchases, it is naturally comparable to the difficulty of climbing to the sky.
Undoubtedly, this has become the core issue affecting our national economy and people's livelihood, macroeconomy, land finance and many other aspects.
If these problems are not actually addressed, the next problems will follow.
In the current difficult environment, stimulus policies have had a limited effect on household income and cash flow, and still cannot open the door to vitality. Most of the current stimulus policies are to encourage people to use their savings to buy a house, rather than actually activating the market.
However, with aggregate demand growth slowing and income expectations falling, few people are willing to take the risk of buying a home.
Considering many factors, it should be said that we have not given enough purchasing power to return to households and private enterprises, so the demand after the lifting of the lockdown will naturally fall off a cliff.
This also makes it even more difficult to squeeze more purchasing power out of the market to push for a home.
The economic situation we are in has led to the property market to stimulate the market with loose policies, but it has never worked.
The core of the problem is nothing more than that the people's pockets are no longer rich.
Our existing stimulus is rooted in getting people to use their savings, but the market has not been energized.
If there is a shortage of funds, who will have the courage to buy a house if the decline in aggregate demand growth leads to a decline in income expectations?
The property market is undoubtedly the focus of our country's economy, but now the property market is facing an extremely severe test.
If the problems of the present are not resolved, the troubles of the future will continue to flow.
However, the solution to this problem does not require overly complex strategies, but simply returns to the core of people's livelihood - people's purchasing power.
We need to bring purchasing power back into our economy.
Only when purchasing power can be effectively returned can the trend of the property market be stabilized.
If we don't have the purchasing power back, our problems will undoubtedly snowball.
The stability of the property market plays an important role in stabilizing our growth, so the policies we introduce must be conducive to the accumulation of funds in the real estate market, rather than continuing to consume liquidity in the market.
Three years after the pandemic, our real estate stock is in jeopardy.
It is not impossible to solve this problem. Depending on the environment in which great powers compete with each other, wealth naturally needs to have a safe home, and real estate is precisely this safe home.
The property market will definitely have something in the future, but the difficulty lies in how to make people have a sense of gain and feel that their wealth is maintaining and appreciating.
Invigorate and do a good job in second-hand housing, so that the wealth of residents' families can be guaranteed, and then there will be a steady growth of land finance, employment, and the sustainability of industrial upgrading.
To revive the property market, we need a larger stimulus scale, focusing on the comprehensive revitalization of the stock of housing and the liberalization of loan credit.
Returning purchasing power and allowing people to breathe is our top priority – not only for safety, but also for people's livelihood.
In addition, the money that is now distributed to the people is not distributed as in Japan, but in the form of loans, which means that it is also a management measure.
The next step of the stimulus of the property market can only be larger, and the focus should be on the comprehensive activation of the stock of housing and the liberalization of loan credit.
Returning purchasing power and giving people a breather is the biggest security issue.
Nowadays, we are facing an important moment, how to protect people's livelihood and support people's livelihood, so that the struggle and reality of the property market can be changed, so that our property market and the broader economic sky can be sunny again.