Housing Enterprises Should Discard Dependency Thinking.

Yi Ge Li

Heard that there are banks in some cities to reduce the number of two suites, and some cities can apply for two suites provident fund loans, several friends came excitedly to ask me: is real estate coming again? Actually, I know they have a word about housing prices under their tongue.

These include practitioners in the real estate sector. They will never miss such a good news.

I told my friends before that the industry is affected by such a big epidemic, but real estate may be one of the less affected industries. Once the epidemic is over, real estate will rebound first. The reason is that the epidemic is only temporarily postponed the demand for housing, but will not eliminate demand for housing. Travel can be less, and the house can not be bought.

In addition to all kinds of universal enterprise support policies under the epidemic situation, some cities have issued special supportive policies, including delayed payment of land leasing time, in view of the operational difficulties of Housing enterprises, especially the tight liquidity of funds. All these initiatives are commendable for all localities to proceed from reality and solve practical problems for enterprises.

However, you need to make clear that these supporting policies are aimed at helping enterprises to tide over the business difficulties under the epidemic situation instead of amplifying them to relax the regulation of real estate. Although some real estate associations have put forward suggestions to adjust the purchase restriction policy to the local government, as a real estate industry association, it is understandable for the members to speak, but will the government listen to something else? I believe that such a proposal is only a suggestion, not to mention the first day.

To relax regulation is to use real estate to stimulate the economy and stabilize the economy. As you know, after the spread of the epidemic, many real estate friends have such thoughts or vague expectations. After all, no industry is faster and more direct than stimulating real estate to boost the economy.

The central bank issued the "fourth quarter 2019 China monetary policy implementation report" reiterated that "do not regard real estate as a short-term stimulus to the economy." Subsequently, Liu Guojiang, deputy governor of the central bank, accepted an interview with the Financial Times reporter after focusing on the relevant issues. He stressed the need to resolutely implement the long-term management mechanism of "housing is used for housing, not for speculation" and the real estate market, to ensure the effective implementation of differentiated housing credit and loan policies, and to maintain the stable interest rate of individual housing loans. On February 25, at the media briefing held by the CIRC, the chief insurance officer and spokesman Xiao Yuan said that the real estate finance policy had not been adjusted and changed.

However, Xiao Yuan added, "the real estate financial policy was originally followed by the principle of" one city, one policy ". All localities can arrange according to their epidemic situation and their own conditions, so long as they do not violate relevant policies. It also provides circumstantial evidence for some cities and financial institutions to adjust the two suite credit policy. However, a comprehensive relaxation of regulation? Don't think about it for the time being.

Over the past 10 years, the rapid growth of the real estate market has been attributed to the return of value after the marketization of housing. In the latter part, the acceleration was driven by factors such as investment demand, while in the crucial stages, such as 2008 and 2010, external factors including policy incentives played a catalytic role.

This gives some practitioners an illusion of habitual thinking, that is, at a critical moment, the state will sacrifice real estate to stimulate the economy in the short term. But let's not forget the two factors: from the medium to long term, after the nineteen big period, China has entered a stage of high quality growth. The extensive development mode of real estate driving economic growth is not suitable for this new stage, and must be abandoned. In the short term, it involves the judgment of the current Chinese economy.

The February 23rd Conference on CO ordinated efforts to promote the prevention and control of new crown pneumonia and economic and social development indicated that although the new crown pneumonia epidemic had a significant impact on the economic operation, China's economy had great resilience and potential, and the long-term trend towards good will not change. According to authoritative experts, there is no problem in completing the task of economic development this year. This means that it is not necessary to rely on real estate to stimulate the economy.

Although the cash flow of the real estate development enterprises is blocked due to the closure of the sales offices, the external financing environment has improved. The central bank has lowered its quota, the LPR has been lowered and its liquidity is ample, which is also beneficial to the real estate market objectively. In fact, real estate has always been one of the biggest benefited industries with ample liquidity. Meanwhile, the frequency of issuing bonds abroad has increased. The scale of debt issuance in the 1-2 months of this year is much higher than that of the same period last year, and even reached a record high in January.

Another friend asked, is part of the housing sector under the outbreak of the curve again overtaking opportunities? It's really hard to say. Of course, some housing companies are holding back because of the blocked cash flow. They dare not invest in the land. Some other strong housing companies can increase their holdings of land reserves in the opposite direction. In some cases, they are eager to sell their places in a reasonable way, and the selling price may not be so high. But not necessarily. A plot of land sold by Beijing in February 18th also created a nearly 50% premium rate.

The real estate industry should rely on the external inertial orbit and rely mainly on endogenous growth. Relying on the rigid demand of large population base and the demand for improvement of middle income groups, the real estate industry still has a long development period, enough housing enterprises to struggle for another 20 years.

In terms of the enterprise itself, if there is no strong and sustainable financial strength, the road overtaking and the great leap forward development will not be the same. Hengda, Biguiyuan and Rong Chuang can not reproduce their development paths. I would like to reiterate once again whether the provision of housing products and services corresponding to a better life will determine the next 10 years growth curve of housing prices.

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