Tianhong Real Estate analyzes the three major highlights of China’s property market this year. Tianhong Real Estate’s original products and piracy will lead to high housing prices, which has always been one of the focuses of social attention. Due to the rapid rise in domestic housing prices last year, a new round of real estate regulation was triggered. Before and after the two sessions, real estate regulation showed signs of further escalation. So, how do you view the development trend of China’s real estate market this year? The author believes that we can observe the development prospects and fluctuation trends of this year's real estate market from the following three aspects.

First, domestic housing prices will basically not decline significantly.

The reason for this judgment is that we can analyze this issue from four aspects.

First, the land supply method of “bidding, auction, and listing” will not change in the short term. Although the current land supply method of "the highest bidder gets it" has its flaws, if other methods are used to supply land, there may be more problems or disadvantages; secondly, the continuous emergence of "new land kings" since last year has further increased housing prices. This expectation is difficult to change under the current shortage of land supply; third, my country's current rapid urbanization process is conducive to the medium and long-term development of the domestic real estate market; fourth, due to the current foundation for economic restorative growth It is not yet solid, and excess monetary liquidity will not change in the short term.

Therefore, although there are currently strong calls to curb high housing prices and real estate regulation may be further strengthened, taking into account some other factors, especially the local government’s reasons for taxation, social employment, economic growth and urban rapid Not only do they not want housing prices to fall due to development considerations, but they also hope that land prices and housing prices can continue to grow steadily within the limits that society can bear. In addition, commercial banks and real estate developers do not want housing prices to fall out of consideration for their own interests.

Based on this analysis, it seems difficult to see a significant decline in domestic housing prices this year.

Second, increase the scale of affordable housing construction and further improve social coverage.

With the rapid rise in domestic housing prices, the problem of high housing prices has become a prominent social problem. Out of the humanitarian spirit of social stability, protecting low-income groups and households with housing difficulties, and drawing on mature international experience, my country will further accelerate the construction of urban affordable housing in the future and further expand social coverage.

However, given that the current financial and resource resources of local governments are still quite limited, our country is still unable to supply affordable housing in large quantities. In the long term, the scale of affordable housing provided by local governments can only cover low-income groups and families that account for about 20% of the population at most, but it is still far from reaching this target.

In addition, from the perspective of the city's long-term development goals, building affordable housing is not a simple matter. Not only must its residential function be considered, but other supporting facilities such as medical care, education, commerce, employment, and transportation must also be considered. . In other words, the construction of affordable housing must be consistent with the development requirements of the city's status and functions.

However, increasing the scale of affordable housing construction will be a highlight or feature of the development of my country's real estate market in the future.

Third, market competition has intensified, and the differentiation of real estate companies has become increasingly obvious.

Among them, land for commercial housing development is very scarce, which is one of the important reasons for the intensified competition among real estate developers. As my country's urbanization process continues to accelerate, the development land for commercial housing in cities will be very limited in the future, highlighting the scarcity of land for commercial housing.

Take Nanjing City as an example. From 2008 to 2020, Nanjing’s construction land indicators (including commercial land, industrial land, transportation and key project land) are only about 143 square kilometers, with an average annual supply of The target of construction land is about 20,000 acres, but in recent years, the annual supply of construction land in Nanjing is about 40,000 acres, which shows that land in Nanjing will still be very scarce in the future.

Therefore, it is expected that urban land prices are not likely to fall, especially in the main urban areas of first- and second-tier cities and third- and fourth-tier cities. Even if the local government lowers land prices, based on current market demand (whether rigid demand or speculative demand), housing prices are unlikely to decline significantly.

However, land resources are very scarce, which will undoubtedly intensify fierce competition among real estate developers. As a result, it is possible to form a competitive pattern: large real estate developers will dominate first- and second-tier cities, while small and medium-sized real estate developers will be "squeezed out" of first- and second-tier cities. As a result, small and medium-sized real estate developers have moved to or entered third- and fourth-tier cities, engaged in cooperative development, or turned to commercial office real estate. However, small and medium-sized real estate developers will still face the "chasing and interception" of large real estate developers in third- and fourth-tier cities.

Of course, in addition to land resources that will intensify competition among real estate developers, another major factor affecting the competitive advantage of real estate developers is funding or capital advantages.

From the current perspective, in addition to traditional bank loan financing, real estate developers will also consider other financing channels, such as loan trust financing, equity trust financing, industrial funds, cooperative development, etc., new Financing varieties and development models will emerge as the times require.

In addition, with the approval of additional issuances of listed real estate companies, it is expected that refinancing of listed real estate companies will gradually be allowed.

The financial or capital advantages of listed real estate developers will greatly enhance their competitiveness, and they are expected to maintain their leading position in this market competition.

As a result, it is expected that China’s real estate market will likely present a new competitive situation in the future in which “the strong will always be strong and the weak will always be weak”.