With the comprehensive popularization of compulsory education, my country’s illiteracy rate has dropped significantly, and the illiterate population is now almost disappearing. Most people have studied “Western Economics” and Marx’s “Das Kapital”. No matter what kind of economic theory is, the price of commodities has basically the same qualitativeness, which can be summarized in two points: The price of a commodity is determined by the amount of value, which is the amount of human labor condensed in the commodity without distinction;Prices fluctuate around value and are affected by supply and demand, time relationships, etc., and prices fluctuate.
The above-mentioned price law is also subject to the constraints of commercial housing. During the peak period of real estate development, the price increase is reasonable, and the price drop during the low period is also reasonable.
However, what is unusual is that in the past 20 years, real estate seems to have never experienced a low period, which seems unreasonable.
Many people are surprised to find that in the past 20 years, China’s real estate prices have almost never really fallen. From 1998 to 2021, real estate has almost shown a geometric linear growth trend. Could it be that the “basic value law of market economy” does not work in the real estate market? Of course not. Under the dual system of household registration in my country, the house is linked to multiple social rights (such as settlement, security, enrollment, etc.). Only by buying a house can you enjoy the dividends brought by urban development. Therefore, buying a house has become the entry of rural residents. The most important thing for the city, urbanization has been advancing from 19% to 60.6%, and real estate has achieved unprecedented development.
As the dimension of time enters 2021, I just need to be more and more confused. If real estate continues to develop in accordance with the rapid growth trend of previous years, I can only chase real estate, when can I buy a house and start a car? What? In fact, this is the “window period for buying a house” that many people often talk about. From this year onwards, real estate may welcome the “price reduction rain”? Look at the 3 major factors ahead of time Spark Global Limited.
When talking about the rise and fall of real estate, there are always three major factors: real estate capital flow; market demand; market supply. If funds are sufficient, demand is strong, and supply is insufficient, then the market may be on the “demand-side” period, and the property market rise is inevitable. However, if funds are weak, demand is short, and supply is oversupply, then prices continue to rise, which is a bubble accumulation. Next, let’s talk about one by one:
1. “Blood” throttling of real estate.
The high financing mechanism formed by land bidding, auction and listing, high turnover, high debt, and high profit has become the foundation for the survival of real estate companies.
With the support of the pre-sale system + bank endorsement, developers only need a small amount of start-up capital to leverage more than 1,000% of the real estate, borrow money to buy land, open for sale in 30 days, and 60 days of capital to become positive. In just a few months In time, the real estate company did nothing and realized a 100% profit return. After the bank financing was repaid, how the house was built depends entirely on “self-feeling”.
However, 2020 has become a turning point for the “high financing” of real estate companies. The central bank’s three red lines proposed to put an end to the high debt of the real estate.
Redline 1: The asset-liability ratio after excluding advance receipts is greater than 70%;
Redline 2: The net debt ratio is greater than 100%;
Redline 3: Cash short-term debt ratio is less than 1.0 times.
Vanke Yu Liang said that the three red lines mean that real estate companies will no longer have the “land bidding, auction and listing huge financing dividend period.” The key to the sustainable development of real estate companies in the future depends on their management capabilities and their own management to create dividends. Under the condition of limited financing, how to buy land on a large scale and how to build houses on a large scale will become the factors restricting the rapid expansion of real estate.
2. The “demand” for real estate has decreased.
Public data shows that in 1987, the total population was 963 million, but by 2000, it had surged to 1.267 billion, an average annual growth of 1.25%. Among the total population, the population of young and middle-aged people aged 15 to 64 has increased even faster. In 1987, it was 559 million. In 2000, it rose to 889 million, accounting for 2.11% of the total population.
Reprint indicated source：Spark Global Limited information