Recently, there has been a lot of news about the real estate industry, among which Evergrande, which has the most debts, has also been issued a liquidation order, although it is not clear the specific situation of the liquidation order here, but it is undeniable that the real estate industry has reached a critical juncture.
However, compared to the debt problem of real estate developers, perhaps the biggest problem of real estate, the elephant that is seen as the room, we have turned a deaf ear, and few people even talk about it.
What are the biggest problems in the real estate industry? In fact, it is a real estate bubble.
But the strange thing is that we rarely hear anyone talk about the bubble in our real estate industry, whether we are academics or industry practitioners, at least not in particular we don't see many articles that talk directly about the real estate bubble or anything else.
Is there a real estate bubble?
If we don't talk about real estate bubbles, is there no bubble in China's real estate industry?
This is clearly not in line with objective reality.
Whether there is a bubble in an asset is actually whether the valuation of the asset is inflated, and from the perspective of our housing prices, our real estate not only has a bubble, but also is very large.
By now, the bubble may be on the verge of bursting.
The real estate bubble is not a new carrot skin, as early as around 2000, some economists issued an early warning of a possible bubble in the domestic real estate industry.
In recent years, the hard landing and soft landing of real estate that we have mentioned many times are actually the difference between long-term pain and short-term pain, and the goal is the same, that is, to de-bubble the real estate industry.
Either the long-term pain is better than the short-term pain, giving the real estate industry in crisis a short, but extremely painful shock**, or letting the real estate industry enter a long-term pain, after a long period of recuperation, and finally achieve the goal of self-healing.
Judging from the current situation, we choose the second option, that is, to let the real estate bubble bubble bubble on its own, rather than actively blowing bubbles.
Because once the real estate industry takes the initiative to bubble, it will definitely make China's family assets fall into **, and in a very short period of time, bring very painful **, although it works quickly, but the final evaporation of wealth may be higher than ten Evergrande liabilities.
Therefore, the problems faced by the domestic real estate industry today are far from being as simple as real estate developers' debts, and the bigger problem behind this is actually how to solve the big problem under such a high housing price bubble.
But even in the medium term, housing prices are also a very painful medicine, Chinese people use decades of savings to buy a property, even if the house price is **20%, this may be decades of income wasted.
However, in the long run, for the healthy development of the real estate industry, housing prices must also be needed to make ordinary income groups afford to buy houses, and the real estate industry will develop healthily and long-term.
But this goal, if viewed in terms of a long-term soft landing, may take decades to achieve.
Can our macroeconomy afford to wait for decades? This is a problem.
Many people say that China's housing prices are normal, there is no bubble, I think this point of view but anyone with a little common sense will not draw such a conclusion, to see whether there is a bubble in the real estate of an economy, the answer is actually very simple, not to look at the level of real estate, but to see the level of income and rent.
Therefore, the level of housing prices can be well viewed by two indicators, one is the house-price-to-income ratio, and the other is the rent-to-sales ratio.
What is the house-price-to-income ratio in China?
Nationally, in 2021, the national average house-price-to-income ratio is 129 or so, this number is almost twice as high as that of South Korea and Japan, so many people have the impression that young Koreans are very involuted, very hard, and under great pressure, but as everyone knows, our young people's pressure may be among the best in the world.
What's more, these countries do not have the habit of young people buying a house before marriage.
Specific to big cities, our house price to income ratio is more exaggerated, which can reflect the bubble of China's real estate industry.
According to the 2021 National 100 Cities Report, China's first-tier cities have the highest house-price-to-income ratio, reaching an astonishing 50 or so, which means that ordinary people need to go without eating or drinking for 50 years before they can buy a property.
As a country with a large population, India has a house-price-to-income ratio of 615. This seems to be a lot higher than ours, but India's public security system is relatively better than ours, and India's overall economic level is still quite different from ours.
Another measure of the real estate bubble is the rent-to-sale ratio, rent and housing prices can reflect the overall demand for housing changes, and China's rent can better reflect the market logic, due to the relationship between income, China's rent is generally much cheaper than house prices, and a good real estate rent-to-sale ratio worth investing in should not exceed 1:200, that is, 200 months of rent is a house.
However, in some cities in China, the rent-to-sale ratio exceeds 1:600, the house price is too high, and the rent is relatively cheap, which indicates that there is a bubble in the asset.
So how did China's real estate bubble form?
In other words, how did house prices get to where they are today? In fact, behind this is the impetus of non-marketization.
Debt can stimulate economic development, based on this simple factor, at the request of the mother-in-law, as well as a large number of hard-working post-70s, post-80s savings for many years, China's real estate industry has been soaring since 08 years.
In addition, real estate investment with rapid economic growth has made China's real estate market surpass the first in one fell swoop, or greatly exceed the first, and play an unparalleled role in condensing the wealth of the entire society.
But what is the difference between the boom and the boom in the real estate market?
The former is the logic of making money, you put the investment in the first place, and the listed company uses the money to invest to expand the scale of production, and can drive employment and economic growth, which is a positive cycle.
And what about the real estate market?
You spend decades of savings, essentially buying a cement box, and the value of the house is predestined the moment it is built, whether it is worth 30 million or 1 million in the future, its value is predestined, and it will not produce more positive cycles.
That's the difference.
* The economy is getting better and better, but the real estate is getting better and better, which is likely to be a precursor to a debt crisis.
Because a large number of families borrow money to buy a house, once they encounter an economic downturn or income loss, they are very likely to bring a debt crisis to themselves, and it is very likely that they will go bankrupt.
In addition, a large part of local income comes from land sales, and in the early stage of housing prices, the local government will control the land supply, hoping to drive the existing land by reducing the supply of land, so as to obtain more land transfer income.
* Land drives high floor prices, which in turn drives house prices**, and so on.
Why are house prices expensive?
It may not be expensive in cement artificial, but in the land. And the height of the land also has the nature of "fried out" to some extent.
Taking Xiamen as an example, data from the Xiamen Bureau of Statistics shows that Xiamen began to control the number of residential land launches in 2009, from 43 plots of land to 8 plots of land in 2015, while Xiamen's land transfer income increased by 225% from 2009 to 2017, from 13.7 billion yuan to 39.1 billion yuan.
When the supply increases, it will stabilize, but when the supply begins to decrease, then the commodity will naturally rise, and real estate is no exception.
As of today, high housing prices have pushed up the household debt ratio, and most ordinary working families will be in debt when buying a house, which seems to be just the debt of residents, but the problems that erupt after its breakdown are something that the entire business community needs to face together.
This could also explain why last year's consumption fell short of expectations.
It is difficult for us to say exactly what our house prices should be reasonable because it depends on the changes in the market and depends on people's needs.
But we do look at the experience of our neighbors, Japan, where the real estate bubble burst.
When Japan's real estate bubble burst in the 90s, housing**, land**, and commercial prices **all**.
According to the Statistics Bureau of Japan,Between 1992 and 2015, residential land** fell by 65% in Japan's six major cities and 53% in all cities.
At the same time, Japan's economic growth rate and inflation rate are also both **,Between 1992 and 2014, Japan's GDP grew at an average rate of only 08%, the average increase in the consumer price index is 02%, compared to 4 per cent in the decade before the crisis6% and 19%。
This is undoubtedly a disaster for Japanese society and even the structure of household assets.
And people are often late in the aftermath of disasters and after disasters.
Today, our consumer price index and inflation rate are as good as those of Japan at the time, which is a worrying moment, and the economic growth rate is similar.
The price paid to Japan has been severe.
At present, China's real estate is the world's largest asset class, with a total market value of about 65 trillion US dollars, compared with the US ** market is only about 60 trillion.
We don't know exactly what the antidote is, but maybe the bursting of the housing bubble isn't a bad thing, and either way, a soft landing and a hard landing are going to land.
The fact that the economy is no longer growing at a high speed does not mean that our income and quality of life are no longer improving, but more benefits to the public and improving the protection of the social welfare system is the only choice for us to recuperate.
Again, this is the experience of Japan.
end.Author: Luo sir, the workplace reference of the new youth. Concerned about the logic behind the development of things, optimistic pessimists. Follow me and grind the knowledge to you.
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