first set up and then break", many people do not understand the meaning. In fact, it is the best interpretation of the current property market.
Many people only remember that "first establish and then break" is the country's guiding ideology for economic work in 2024, in fact, these 4 words have been put forward since July 2021, and have been mentioned in 2022 and 2023, we have been saying it for 3 years, and we have been doing this for 3 years, and we are currently continuing to move forward according to this line of thought.
Such a top-level design idea suitable for all walks of life, including real estateSpecifically in terms of real estate, the vernacular translation is, "first stand up, then you can break the game". Undoubtedly, the first is to acknowledge that the past model of real estate development was problematic, and in the long run, there is a need to change strategies and return to the normal development track, which is often said to ensure that healthy and stable development is maintained. But a premise is needed, the short and medium term needs to be stabilized, and the market cannot be allowed to decline too fast, otherwise, there will be no object to break the game, how to talk about breaking the game?
At present, in order to stabilize the market, it is necessary to stabilize real estate development investment, sales indicators, etc., we all know that at present, there is not only no cash flow in the hands of real estate companies, but also a butt of debt, which can be described as unable to move, and key actions such as building houses, taking land, and selling are seriously restricted. If there is no one to help and give a ride, it is impossible to improve the trend of the market continuing to decline. The problems that real estate researchers can see, the country is naturally well awareIdentify the "key points" and continue to exert force.
This "key point" is that a large amount of money needs to be injected into real estate enterprises, so that high-quality real estate companies can have their own hematopoietic function, so as to drive the local market, transmit it to the housing market, and finally realize the recovery of the overall market。Starting from the end of 2023, the deployment of the first financial work conference requires the promotion of a virtuous cycle of real estate and finance, and meets the reasonable financing needs of real estate enterprises of different ownership systems without discrimination, followed by a symposium on financial institutions, which requires the growth rate of real estate loans to be no less than "3 indicators", and sets a principle that requires financial institutions not to "reluctantly lend, withdraw loans and cut off loans".
Subsequently, we also saw some signals, the four major banks and large local banks have successively talked to representative real estate companies and exchanged needs, but what is the result? It can be seen that commercial banks take into account their own risks, or the bottom line is not easy to control, and the actual funds given to real estate companies are not much, and some data show that in November and December 2023, the loans for real estate enterprises are less than 50 billion. This amount is really a drop in the bucket for real estate companies that are in debt of hundreds of billions or even trillions at every turn.
Therefore, in the past two days, we have seen a "message" that the property market has repeatedly been on the hot list, that is, the central bank and the State Administration of the Financial Authority are speaking to support the business department to coordinate real estate financing. The Ministry of Housing and Urban-Rural Development, as the competent business department, has also deployed relevant work in the near future, and at this deployment meeting, there are also heads of relevant financial departments to participate. It can be seen that the specifications are high and the strength is great, and the signal released is naturally different from ordinary statements. According to the information of People's Daily Online, at least two high-quality author lists that have not been seen in recent years are mentioned:
The first is to establish a coordination mechanism for urban real estate financing, which is a major measure to meet the reasonable financing needs of real estate enterprises under different ownership systems and promote a virtuous cycle of finance and real estate.The establishment of an urban real estate financing coordination mechanism as a major measure to promote a virtuous cycle of finance and real estate has never been expressed before. forWhat is the need to establish such a mechanism? Just look at the operating logic of real estate companies and banksOne is to shout the bank to lend to the house, the thunder is loud, the rain is small, the real estate companies are shouting, and there are a lot of statements here, that is, it is always difficult for funds to flow into the hands of real estate companies, through the city according to its own situation to coordinate, a project a strategy, a developer a strategy, bank to real estate enterprises, point-to-point, by the deputy mayor in charge, housing and financial departments to participate in the follow-up implementation.
The second is the operating logic of a virtuous cycle of finance and real estate. What do you mean? It shows that the bank does not give funds to the real estate enterprises, the operation of the real estate enterprises is difficult, the debts of the banks are not repaid, and if the bad debts are too much, there may also be systemic financial risks. It is required to estimate the loan progress of the project in time, and to lend one after the evaluation, and to form a regular evaluation mechanism, which can be described as a nanny-style lending model. Real estate companies have funds, they can repay bank loans, debts are not defaulted, buyers are also confident in these real estate companies, and the sales situation of their houses will gradually improve, which is probably the virtuous circle between the expected "bank and enterprise".
The second is to adapt to the new situation of major changes in the relationship between supply and demand in the real estate market, accelerate the construction of a new model of real estate development, combine the long and short, treat both the symptoms and the root causes, and promote the steady and healthy development of the real estate market. It is necessary to adhere to city-specific policies, precise policies, and one city, make good use of the policy toolbox, fully give urban real estate regulation and control autonomy, and cities can adjust real estate policies according to local conditions.A very familiar word, there is a similar expression in the hot period of the property market, but at the moment, there is a different understanding. The first half is a commonplace problem, so I won't explain much, because it takes time to "combine the long and short, and treat both the symptoms and the root causes", and the focus is on how to do it in the short term? This is also related to the issue of stabilizing the market in the "first establishment" in the "first establishment and then breaking". Actually, it has been made very clear in the second half:Because of the city's policy, that is, different cities can implement specific strategies according to their own market reality, but we know that for a long time, the optimization of real estate policies have been controlled by the "invisible" hand, ** local developers want to reduce the price, and they can be on the hot search immediately, because people do not believe that they can clear the customs "release", and a sentence of "price reduction sales are not conducive to the stable development of the real estate market" The big hat was buttoned up. Well, the Ministry of Housing and Urban-Rural Development announced that "the autonomy of urban real estate regulation and control will be fully granted, and cities can adjust real estate policies according to local conditions". Meaning, according to your actual situation, you can do what is appropriate and do not interfere.
So, what does the place want to do most?
Obviously, the most urgent thing for most cities is to allow developers to sell at lower prices in order to recoup their funds. The reason is very simple, in fact, many places have been made miserable by the developer, a real estate said that the construction will be stopped, and the owner can only find a place to uphold justice, and if it is not good, it will also affect social stability. But in such a market environment, this can't put all the boards on the developer's head, obviously the house is not good to sell, and you are not allowed to reduce the price, who is to blame? Now that the decision-making level allows local governments to regulate and control independently, then, the first measure to sacrifice the big chess should be to allow real estate companies with difficulty in capital turnover to reduce prices. This is the first "reduction" that the Ministry of Housing and Urban-Rural Development may bring to the market this timeThe price reduction of unsalable real estate means that buyers can really buy cheap new houses now.
In fact, a reduction was also revealed, and that is the mortgage rate.
You think, now that the local government is allowed to give full play to its independent regulation and control power, the first thing to bear, in addition to the above-mentioned reduction of housing prices, the most practical effect is to reduce the cost of home buyers, that is, the mortgage interest rate. And just this week, Li Mingxiao, director of the Policy Research Department of the State Administration of Financial Services, made it clear that he would support local governments to further optimize housing loan policies such as down payment ratio and mortgage interest rate to meet rigid demand and improve housing demand.
How low can it be? Let's look at Japan, mortgage interest rates are generally below 1 point, if the qualification and reputation are relatively good, you can even achieve zero interest rate, and you can pay the principal when you pay the mortgage. Of course, it is impossible for us to adjust it to that low all at once, but according to the statement of the Ministry of Housing and Urban-Rural Development and the State Administration of Finance, there is no doubt that interest rates will continue to fall.
In any case, the cost and cost of capital have ushered in considerable adjustment opportunities, congratulations to the next person who is ready to buy a house.
Finally, the question is, can the market return to the top in the future?
With the topic mentioned by Professor Dong Fan, a well-known real estate expert and the predictor of Beijing's housing price of 80w per square meter, he said this in a paragraph released a few days ago:
The potential scale extreme point and the theoretical scale extreme point of real estate development and transactions have not yet arrived, but in practice, the extreme point will not appear, which is caused by the impact of long-term and strict regulation, especially the three red line policies, on the industry. Regulatory shocks and social changes have caused the actual development trajectory of the real estate industry (investment scale, construction area, transaction scale) in recent years and in the future to deviate from its theoretical development trajectory.It can be seen that he still believes that the current demand for real estate is still there, but due to policy reasons, it is impossible to restore the former glory. Of course, he was referring mainly to the size of the market. As for **? I think we can look at the current policy trend, and maybe we can see some clues. For example, on January 28, the construction of affordable housing has been put on the agenda, and many provinces and cities such as Shenzhen, Fuzhou, and Guangxi have determined their construction plans, and some have even started construction, what is this signal?
This is actually an important part of the new real estate model proposed by the relevant departments at the end of last year: guaranteed housing is guaranteed, and commercial housing is returned to the market. In the eyes of the industry, this is to pave the way for the full liberalization of real estate restrictions. The direct impact is that with the addition of a large number of allocated affordable housing in various cities, the total number of housing will definitely increase, and there is nothing to say about competing with ordinary commercial housing customers, and the value of the latter will be challenged. Of course, since the later restrictions have been relaxed, it means that it is not the same platform as affordable housing and ordinary commercial housing.
The above is more subtle, and the actual differentiation should be greater.