Let's discuss it with you today. What's going on here?
1. Why does the real estate price exceed the income?
Starting from the most basic logic of economics, we regard the house as the most special commodity. Since it is a commodity, its price is not surprising. Through the decision of supply and demand, we can understand why house prices always worry us so much.
Let's talk about the supply of real estate. Anyone who studies real estate knows that as the most special commodity, the supply of real estate involves too many subjects, basically there are four key subjects: developers, land providers (governments), financial institutions and builders.
First, let's talk about the supply of land. Brother Han has talked about the land supply problem in China more than once, but here we still have to repeat the same old story. In China's special land management system, there is only one land supplier, that is, the local government. Because our land is owned by the state, only the land management department of the government is qualified to put the land on the market for sale. Therefore, what kind of land the local government provides often determines the basic price of local real estate, which is called floor price in land auction. Because a considerable part of the local government's fiscal revenue depends on the auction revenue of land, any subject has the nature of profit-seeking in economics, so the rising land price is often one of the best choices for land suppliers to obtain higher income.
Secondly, talk about financial institutions. Under the current environment in China, banks are the only entities with the strength to provide financial support for land and real estate development. This extremely single financing channel makes the actual real estate fund providers all banks. In fact, real estate developers' own funds are generally only about 20%, and most of the real estate development funds come from development loans. This kind of capital with leverage and interest requirements makes the real estate price have a natural demand for price increase. To give the simplest example, the price of real estate has gone up.
Third, talk about developers. Real estate developers are the most vulnerable group in China. It is true that in the process of real estate development, many developers have hitched a ride on real estate development with the help of dividends from real estate development, and many people have earned a lot of money. However, it is also very obvious that their behavior is restricted by the first two groups. According to the law of economics, in such a large capital-intensive industry as real estate, there has been an obvious "28-20" differentiation mechanism in China, and the powerful large-scale real estate developers are more capable. At present, it is more and more difficult for small and medium-sized real estate developers to make money, and the advantages of large real estate developers are increasingly obvious. Under these changes, many cities have become the world of a few large real estate developers. The larger the organization, the stronger the ability to resist the market cycle, so the more obvious the efforts to push up housing prices.
With the joint efforts of the three, the rise of real estate prices is also reasonable.
Let's talk about demand again. For a long time, everyone has used the classification of what is just needed and what is improved demand to describe real estate demand, but this classification has too much uncertainty and is not necessarily the best classification method. Until recently, a new way of demand analysis appeared, which gave Han Ge another perspective.
This way of analysis, Han Ge summed it up as the progressive effect of intergenerational migration. The starting point of this analysis comes from Han Ge's earliest research on the flow of migrant workers. Because our population has long been bound to the land and its locality, everyone's needs are fixed in the locality. However, with the emergence of reform and opening up, especially 1998 began to cancel welfare housing distribution, the demand for real estate began to release, which was a shifting and progressive demand. On the one hand, people who live in low-rise buildings want to live in high-rise buildings, and their houses will be taken over by new families. On the other hand, due to the liberalization of population movement, especially after buying a house without a hukou, a large number of floating population have formed more and more families. This gradual demand makes the real estate demand in China show a strong extreme demand.
Therefore, as long as the population flows into the city, this kind of stepped demand will continue to form and push up the local real estate demand. In addition, the traditional concept of marriage and love in China is that there is no house, and the mother-in-law doesn't want her daughter to marry in the past. Young people who want to get married, especially young men, tend to go bankrupt and buy a house. Buying a house often empties the accumulation of oneself, parents and grandparents for almost three generations, thus forming a cumulative purchasing power demand.
In each step of the transition, each step will increase a lever level. With the increase of steps, the endorsement of leverage will become bigger and bigger. As long as the people who take over the market continue to enter, the market will continue to circulate, thus continuously strengthening the price growth trend of real estate.
When we look at our low income, real estate developers look at your whole family, from you to your parents and grandparents. This comprehensive income level, and even the accumulation of all family wealth for decades, is the ultimate force to support real estate prices.
Under the influence of both supply and demand, it is quite difficult for real estate prices to be low.
Second, where are the risks of the current real estate?
All along, everyone has been talking about the risks of real estate. If we say that there is no risk in China real estate against our wishes, it is obviously a lie with your eyes open. There must be risks in real estate, but what are the risks? As mentioned earlier, the housing market in China has a very diversified supply structure, and there are many links in the whole industrial chain. Although there are many people taking over the market, so many links are like dominoes. As long as there are risks in one place, there will be risks. Moreover, the development of any single industry cannot be divorced from the economic environment. If the real economic environment has an impact, the real estate market cannot be immune.
From the observation, there are three main pain points of fragile dominoes that may exist in idle real estate:
First, what is the macroeconomic environment? Real estate is a commodity under any circumstances. Since it is a commodity, it will be affected by the macroeconomic environment, and from the perspective of economics, it will be restricted by the economic cycle. If China's economy enters a medium-high growth stage for a long time, just like the commercial banks that only gave out a year-end bonus of one yuan a year ago, even the most profitable commercial banks in previous years have no surplus grain, and the plight of other industries can be imagined. Once everyone's income growth is less than expected, or even reduced, I am afraid that the foundation supporting the real estate market will be shaken and risks will arise.
Second, what if there are not enough successors? The premise of our current demand analysis is that the population of the city is flowing in and there are enough people to take over. However, it cannot be ignored that the number of migrant workers, as the first demographic dividend, is decreasing sharply, and there is a labor shortage in many places. What supports the development of real estate now is the second demographic dividend, that is, college graduates are increasing every year. These people are the mainstream of urban purchasing power population. However, in many places, the number of applicants for the college entrance examination has begun to decrease. What will happen if the inflow population decreases in the future? Because no matter how people face the migration barriers formed by high housing prices, they will one day exceed their limits, and the needs of their mother-in-law will never make them unable to survive. Finally, if there is no pick-up, how to play this game of parcel delivery?
Third, how to raise the interest rate level? All along, our monetary policy has been in a loose state, and it is easy to borrow money. Therefore, many people will choose a house with a down payment ratio below 30%. Now that the Federal Reserve has started to raise interest rates, it has become a high probability event for the central bank to raise interest rates. Once our interest rate level returns to a higher level, many people may not even be able to pay their mortgage, which may lead to a big risk event.
There are risks in real estate anyway, which deserves our high vigilance. I hope everyone will seriously consider it.
(The above answers were published on 20 17-02-05. Please refer to the current actual purchase policy. )
Click to view more real estate information.