Li Yige Column, "Loose" Funds Can Not Flow Into The Property Market.

The Political Bureau of the Central Committee held a meeting in May 15th that the positive fiscal policy should be more positive and effective, and the prudent monetary policy should be more flexible and moderate. The Central Political Bureau meeting held in April 17th clearly raised the deficit rate, issued special anti epidemic bonds, and increased local government bonds.

This year's government work report should make arrangements for special treasury bonds. According to the analysis of experts, it is estimated that the issuing scale of treasury bonds and local government bonds will be 5 trillion and 200 billion yuan and 6 trillion and 100 billion yuan this year respectively, representing an increase of 996 billion yuan and 1 trillion and 760 billion yuan respectively over the previous year.

In January 6th this year, the central bank dropped 0.5 percentage points and released long-term funds of about about 800000000000 yuan. In March 16th, Pratt & Whitney finance was released on a quasi targeted basis, releasing 550 billion yuan of funds. In April, it dropped 1 percentage points for small and medium-sized banks and released 400 billion yuan of funds. A total of more than 1 trillion and 750 billion yuan has been released.

The above funds add up to about 4 trillion and 500 billion yuan. The fiscal and monetary policies of our country have been quite restrained compared with the unrestrained monetary release of some major Western economies.

Although not publicly stated, intellectually disagree with the idea of real estate bailout, but many real estate insiders are delighted by the idea that they can make a big difference in their industry. Some of these funds have already been clearly pointed out, some of which need to be clarified, but one thing is certain that they are not allowed to flow into the real estate market.

In April 3rd, the Ministry of Finance requested that local government special debts should not be used for land acquisition and storage and real estate related projects. In April 17th, the meeting of the Political Bureau of the Central Committee once again reiterated that it is necessary to insist that the house is used for living, not for the purpose of frying, and to promote the steady and healthy development of the real estate market. In April 22nd, Xiao Yuan Yuan, chief risk officer of the China Banking Regulatory Commission, said at the news conference of the new China office, the CIRC asked banks to monitor the flow of funds and resolutely correct the violation of loans into the real estate market. In May 10th, the central bank issued the first quarter of 2020 China monetary policy implementation report pointed out that insisted that the house is used to live, not for the purpose of speculation and "do not take real estate as a short-term stimulus to the economy" requirement, to maintain the continuity, consistency and stability of real estate financial policy.

The reason why I take the trouble to quote the central and regulatory departments' policies is to remind real estate practitioners that even under the enormous downward pressure on the economy, the country has no idea of using real estate to provide the bottom.

In response to the Asian financial crisis in 1998 and coping with the global financial crisis in 2008, real estate stimulated the economy indeed. Why can't we use this method now? Personally, I think there are at least two points.

First, the credit related to real estate has occupied the largest share of the total credit volume. If the above "loose" capital is flowing into the real estate market, it will inevitably occupy the funds of other industries. The real economy, especially the small and medium-sized enterprises affected by the epidemic, is much more difficult to get money.

Two, housing prices are already high. If more capital is allowed to flow into real estate, it will bring a new round of housing prices. Some time ago, some luxury projects "seconds light", caused public concern. In fact, this is only a small number of projects in individual cities. It is not a common phenomenon. Some cities, such as the limited sales of Beijing, are still not ideal. What are people worried about? It is worried that this phenomenon will spread, resulting in a large increase in housing prices. In the case of high housing prices, another round of rise is not only unbearable for people who just need and just changed, but also the social cost that it leads to rise sharply is also unbearable for the whole city. Short term returns are far greater than medium and long term harm, so the decision making layer has abandoned this choice.

Since the adjustment of the property market in the second half of 2018, some cities have fine tuned the control measures according to the principle of "one city, one policy". This year, due to the impact of the epidemic, a few of the three or four line cities have been trying to relax regulation. But we all see that as long as it involves relaxing the purchase restriction loan, it will not work and will be stopped by the superior. This should be very clear. The basic principles of real estate regulation should not be challenged.

So how do we see the rebound in sales of commercial housing since late March? In fact, I told my friends that real estate must be one of the fastest recovery industries, and housing consumption will only be delayed. Therefore, when the sales office opens, just need to wear a mask to buy a house; when the housing estate can see the house, the second-hand housing transaction will increase.

From late March to April, the demand was released after the delay in the epidemic. If this time is also known as the "small spring" of the property market, its time will be postponed. At present, the turnover will be better in May. To judge whether the real estate market is really getting warmer, we need to compare the volume of 5-6 months with the data of last year.

How do we see the warming of the land market this year, especially in the near future? First of all, local governments have the power to quicken the pace of land leasing under the condition of reduced revenue. Secondly, increasing the supply of land will help to alleviate the pressure of housing prices, and it is also necessary to maintain the regulation of real estate. Moreover, at present, the land market is still moderate, premium has risen but controllable, and the first tier cities land transactions better, not equal to the three or four line cities are also very good, not to mention, even the first tier cities also have plots filming.

Even if the local government wants to sell more land, it will be useless for the housing companies to take it. We see that the reason why the land transaction premium rate is rising steadily is because the housing companies dare to take and dare to rob. In addition to the previous statement, the market transaction situation is better, housing enterprises capital cost is also an important factor. A big sign of liquidity is the cost of capital. Therefore, although real estate can not be directly divided into 4 trillion and 500 billion parts, it is indirectly benefited.

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