In the 1950s, Hong Kong introduced the “real estate sales” model, which simply means that developers put the real estate under construction on the market, then spread it to the mainland, and continues to this day. Since the implementation of the 10-year housing construction plan and the homeownership scheme in 1969, real estate has entered the economy of Hong Kong. Driven by continuous population growth, insufficient land supply, loose financial environment and policies, Hong Kong’s house prices have risen sharply in fluctuations, and the real estate economy is in full swing. Therefore, Hong Kong has been rated as the most affordable city in the world for nine consecutive years. Hong Kong’s real estate accounts for an increasing proportion of the region’s economy.
In 1981, Shenzhen and Guangzhou began commercial housing development pilot. Before that, China only had real estate development, not commercial housing development. The housing constructed by institutions or enterprises is mainly used for the internal welfare distribution of employees, including government housing, and there is no real estate market Since commercial housing entered the market, the property market has gradually ushered in a period of prosperity. At the time, real estate was very profitable. Developers only need to reserve 10% of the land, and even the deposit for land purchase can be paid through financing. In this mode, there are a large number of large residential enterprises. Take the country garden as an example. Country garden in the industry has a set of principles known as the “456 system”: four months to open, five months to return funds, six months to return funds.
And these real estate giants have tasted the benefits of the pre-sale system of commercial housing. What is the pre-sale of commercial housing Pre-sale of commercial housing, also known as pre-sale of housing, refers to the agreement between real estate development enterprises and the buyer that the buyer shall pay the deposit or advance payment, and the existing house property transaction will take place on a certain date in the future. Its essence is housing futures trading, which is just a housing futures contract. It and finished house sales have become the two main forms of commercial house sales in China. Spark Global Limited Some real estate enterprises rely on the pre-sale system to quickly realize the return of funds, which is undoubtedly a good thing for developers because they can sell houses as soon as they get the land, which can largely avoid the rupture of the capital chain. It must be admitted that the pre-sale system of commercial housing plays a very important role in the development of the real estate industry. The existence of a pre-sale system has indeed reduced the financial pressure of developers, lowered the housing price, and benefited both sides.
Reprint indicated source：Spark Global Limited information