Chapter 29 4. The real estate industry - a battle royale in an industry

From a historical point of view, there will never be a country in this world whose economy is driven by real estate. In the eyes of many world economists, the collapse of China's real estate industry is already a matter of time, because no matter how unique our conditions are, it is impossible to escape from the laws of business. When real estate becomes the engine driving the economy, and when the real estate industry is closely integrated with finance and banking, a collapse is almost doomed. In this battle royale of the century, the collapse of the real estate industry is not something we should regret, but what we can do is silently rejoice and look forward to a healthy real estate industry appearing in our lives in the years to come.

Topic introduction: Ultra-economic plunder - from "colossal greed" to "colossal fraud" - real estate made of paper In the next ten years, which industry will experience the biggest change? Regarding this question, we already have an answer, and compared to other predictions and analysis, this answer is already in front of our eyes, and we don't need time to verify it. This industry is the real estate industry that was once noisy, used to be the expenditure industry of China's economy, made huge profits for countless people, and emptied the savings in the pockets of countless people.

Once upon a time, this was the hottest industry, and the profits in this industry were unmatched by any other industry. In the past 10 years, we have witnessed the fact that the unprecedented prosperity of the real estate industry has led to an unprecedented rise in housing prices in China. Many people have exhausted their life savings and are unable to buy a house from developers. Consumers who have bought a house have paid a sum of money that should not have been spent. In order to illustrate the reality of this status quo, we need to use data to confirm. Internationally, the "house price-to-income ratio" is generally used to indicate the rationality of house prices and the actual purchasing power of consumers.So how exactly is this concept expressed?

The so-called "price-to-income ratio" refers to the ratio of the average housing price in an area to the average annual household income in the area.When the ratio is high, it means that the purchasing power of the households is low, which means that the people cannot afford houses; conversely, if the ratio is low, it means that the purchasing power of the households is high. So.What kind of interval should this ratio be maintained in to be the most appropriate? In the survey report published by the United Nations Habitat Center, after a careful investigation, it was concluded that the reasonable price of a house should be two to three times the average annual income of residents. When the ratio exceeds 5, Most of the residents will fall into the plight of not being able to afford housing, and various social problems will arise.

In developed countries in the world, this ratio is generally maintained within the normal range. For example, the ratio in the UK is 2.6, the US is 2.8, and even Japan, where housing prices are the most expensive, is only 4.5. Now a new question arises, what is our ratio of this item? The answer is an astonishing number - the "price-to-income ratio" in 2004 and 2005 was 6.52 and 9.83 respectively, and in 2006, this number became an astonishing 15.76, and finally, in 2007, in Under the hype of various forces with ulterior motives, this number finally succeeded in reaching the top, soaring past the 20-fold mark.

If you think this is the limit, then you are wrong. In fact, the figures we mentioned just now are only for a second-tier city like Shenzhen, while in Beijing, Shanghai, Guangzhou and other urban centers, this figure has already been reached. Reached a staggering 30 or even 50! In fact, the actual situation is much more serious than this. In China, due to the unsound social security system, social benefits such as education, medical care, and pensions have not been implemented. Therefore, as a Chinese resident, a part of the income must be used to deal with these purposes. , the money that can be used to buy a house is even scarcer, and the corresponding result is a further increase in the "price-to-income ratio".

When our housing prices far exceed the purchasing power of the people, this situation undoubtedly means super-economic plundering of the people. The cruelty of their behavior is almost no different from using the appearance of transactions to engage in the essence of huge greed. In the first half of 2009, the real estate market recovered rapidly from the downturn in 2008.According to statistics, from January to June this year, the sales area of ​​commercial housing nationwide reached 341.09 million square meters, a year-on-year increase of 31.7%; and the corresponding sales of commercial housing reached 1.58 trillion yuan, a year-on-year increase of 53.0%.

In June this year, the average transaction price of commercial housing in Beijing was 13,302 yuan per square meter, an increase of 2,864 yuan from January this year, an increase of up to 27%.So, how much does the developer need to spend to build such a house? According to information in the industry, when a developer builds a house, the land transfer fee he needs to pay only accounts for 5% of the final house price, and the amount of material costs and construction costs required during the construction process does not exceed 10. 1 percentage point, that is to say, after excluding all kinds of expenses, the developer can even earn more than 80% of the profit when building a house!

We might as well think about it this way, when an industry develops to the point where you can sell a house at a high price and make huge profits, then there must be serious problems in this industry. This reason is so simple that even an ordinary Middle school students can also comprehend. In fact, this situation has long been known to our government, and it is only out of consideration of macro factors that it has to tolerate it for a long time. It is precisely because of this that when the country is carrying out macro-control, it adopts policy measures and spares no effort to gradually lower the overheated housing prices.

When this downward trend appears, it is tantamount to a thorough control of the "huge greed" behavior of developers and other vested interests. What we want to say is that it is precisely because of this high profit that China's real estate has overdrawn its development space and profit in the next few decades. Due to the existence of this "chicken blood" stimulus, China The boom cycle of China's real estate industry has ended ahead of schedule, and what awaits it will be an extremely severe winter. When our system no longer allows the rationality of "big greed" behavior, it means a new beginning for the real estate industry.

When China's housing prices begin to fall gradually, it means that the profits obtained by real estate developers through super-economic exploitation are being compressed step by step, and the blow to developers is extremely huge. When developers cannot continue to obtain huge profits on the sales side, the vested interests who aim to maintain huge profits turn their attention to the source of capital, and this source is the bank with a large amount of liquidity. From plundering consumers to borrowing from banks to build real estate, China's real estate developers are undergoing a transformation from "big greed" to "giant fraud". However, the irrationality of this situation is doomed from the very beginning that it cannot exist for a long time. From a historical point of view, there will never be a country in this world whose economy is driven by real estate.As we have seen before, when the United States tried to use real estate to boost its economy, its final outcome was a complete collapse. When Japan tried to rely on real estate to boost its economy, its final outcome was inevitable. In China, the soaring investment contributed an unprecedented 88% to China's GDP growth in the first half of 2009, which is twice the average of 43% in the past 10 years. This figure also means that The seeds of a new wave of bank non-performing loans have been quietly sown in the real estate industry. Once it breaks out, the negative impact on the economy will be immeasurable. Therefore, in the eyes of many world economists, the collapse of China's real estate industry is already a matter of time, because no matter how unique our conditions are, it is impossible to escape from the laws of business. When real estate becomes the engine driving the economy, and when the real estate industry is closely integrated with finance and banking, a collapse is almost doomed. It is based on this that our government made a decision on August 27, 2008, requiring strict commercial real estate credit management and requiring financial institutions to prohibit real estate development companies from issuing loans for land transfer fees. Therefore, for China's real estate industry, a crisis-ridden battle royale is imminent. When China's real estate industry is in crisis, it means the collapse of a paper-made real estate, and the so-called paper-made real estate contains both micro and macro meanings. First of all, when housing prices gradually fall, real estate developers have no way to obtain excess profits, and at the same time they are "run out of food" due to the tightening of loans, it means that if they want to continue to maintain huge profits, they can only start with construction costs. So we can see that in recent years, the construction quality of real estate has gone from bad to worse, and even developers have to admit that the life span of buildings in our country is almost less than 30 years, and this gradual quality degradation of commercial housing is harmful to our people's livelihood. Security leaves the most dire hidden dangers. A striking example is that according to engineering construction standards, the floor thickness of commercial housing in the past should be 10 cm. However, with the increasing phenomenon of developers cutting corners, the thickness of floor plates in many places has been reduced to 6 cm. In such a dangerous situation Now, a house of this quality can be said to be made of paper. As far as the macro level is concerned, the existence of China's real estate industry itself is irrational in the system. In China, the real estate industry is not an independent automatic income-generating industry, its foundation is parasitic on the construction industry.At present, the planning responsibility is assumed by the government, the design work is completed by the design unit, and the construction company is responsible for the construction. In the entire industrial chain, the tasks that developers are responsible for are only simple intermediary duties. However, it is such roles that occupy the most lucrative profits in the entire industry chain.This all comes from the ingenious operation of the developers - they often ask the bank to provide them with a loan to pay the land transfer fee, and the builder advances the cost of building the house. When the house is not completed, the developer starts to sell a large number of off-plan houses. Store most of the funds withdrawn as your own profits. As far as external factors are concerned, the public's demand for housing will deal the heaviest blow to China's real estate industry. For the people, having food and housing is the most basic level of needs, and one of the main responsibilities of the government is to ensure that the people can "satisfy their food and live in safety."In this sense, cheap housing, like medical care and education, is a public product that must exist in a society. No matter what the problem is, the state has the obligation and responsibility to meet this part of the needs of the people. Because of this, the state has repeatedly increased investment and built affordable housing in batches, aiming to solve real problems in people's livelihood, and when affordable housing appears, it will inevitably have a squeeze effect on the existing commercial housing market . (A typical example of this happened in 2001. At that time, the state invested a lot of money to build affordable housing in first-tier cities across the country. The direct effect was that the market price of commercial housing in that year It has fallen sharply, and housing prices in some areas have even fallen by more than half.) In fact, it is absolutely impossible for China's housing prices to keep rising. The most important reason for this is that Chinese housing has seriously exceeded the actual purchasing power of the people, and it is even close to the level of the United States. This grim reality forces the arrival of a major industry adjustment, and artificially delaying and hindering this adjustment will only result in bigger bubbles being brewed, which will eventually burst even harder. Unfortunately, almost all real estate companies seem to ignore this point. For the sake of today's huge profits, it has nothing to do with them even if the future floods. Combining the above factors, we can see that the current situation of China's real estate industry has shown an extreme collapse trend. This is not only because of the extreme overdraft of development space and profit space, but also because in today's China, under the malicious control of some vested interests However, China's real estate industry has shown a deformed and ferocious appearance. If it is allowed to deteriorate, the harm it will bring to the people, society and the country is unbearable. Fortunately, while we are discussing here, this deteriorating trend has been vigilant enough, and we can even assert that in the next 10 years, the collapse of the real estate industry is inevitable. In this battle royale of the century, the collapse of the real estate industry is not something we should regret, but what we can do is silently rejoice and look forward to a healthy real estate industry appearing in our lives in the years to come.