There is a surplus of houses, and developers are still keen to build buildings, 4 major reasons for analysis
There has been a lot of debate in the industry about whether there is a surplus of housing in the country. It wasn't until last year that authorities revealed a shocking statistic: there were 600 million homes in the country. If 10 people live in each house, then there are enough homes for 6 billion people. This, of course"600 million"Housing also includes self-built houses, schools, factories and other buildings. However, even so, there is a serious overload of housing in our country.
But the strange thing is that although there is a serious surplus of houses in China, developers are still building buildings, and tens of millions of new commercial houses are listed every year. In this regard, many netizens are puzzled: why do developers continue to build houses when they know that they are already in surplus? In fact, there is no close relationship between the fact that developers continue to build houses and the surplus of houses, and there are four main reasons why developers continue to build houses:
First, there is an imbalance in the distribution of domestic property.
If we take into account the size of the domestic stock of housing, there is indeed a surplus of housing in our country. But the problem is that, in addition to housing, housing is now endowed with financial attributes and has become an investment vehicle. The fact is that a small number of people own a large number of houses, which are not used for their own residence, but as bargaining chips, accumulated, that is, not rented or **, ready to be sold at any time. It is clear that a large amount of stock housing is backlogged in the hands of speculators and cannot be circulated in the market. As a result, developers have to build a large number of homes every year and then give them to families with new needs or those who are renovating.
Second, urbanization is driving demand for home purchases.
China's urbanization rate has reached 6616%, which is still far from the average urbanization rate of 75% in developed countries. In order to promote China's urbanization process, more and more rural residents are moving to the city to buy houses and settle down, becoming new citizens. National real estate developers must also continue to build homes to meet the housing needs of this group. Only when urbanization reaches the level of developed countries will developers be able to gradually reduce the number of houses built.
The third is to build commercial housing for families who buy improved housing.
Many families who buy a house can only afford a small house at first due to the limited financial conditions of their families. Later, when their economic conditions improved or their population increased, they wanted to exchange their house for a larger one. As a result, developers have to keep building homes to meet the needs of this segment of the population. In addition, there are some families who are upgrading, they feel that the design of the old house is not reasonable, and they want to live in a better designed house to get a better living experience.
Fourth, developers must build buildings in order to survive.
The developer's job is to keep building new commercial houses, and then recoup the funds in due course. At the same time, if developers stop buying land to build houses, there is no reason to borrow from banks. And once the house cannot be sold, the developer's capital chain will be broken. Therefore, in order to be able to apply for more loans from banks, developers must continue to purchase land to build houses.
It is worth mentioning that the local government also hopes that developers will continue to build, thereby increasing land revenue. And all walks of life related to the real estate industry are booming, thus driving the rapid growth of the local economy. As for the over-construction, will the risk of bank loans increase? This is not an issue that can be considered immediately.