Real estate can be a pillar industry of China's economy for a long time

Recently scholars of the media have been particularly sensitive to the trend of housing prices. There are people who look at the higher ones and others look lower. More government officials and scholars predict that housing prices will not fall by more than 15% in the next two or three years.

With the fear of economic downturn and the market’s expectation of monetary easing policy, people who are worried about high property prices can not help but appeal that the property market cannot be relaxed. Subsequently, the government indicated that the regulation of the property market will continue to be relaxed, and the developers will start to worry that the real estate industry will prepare for the winter in 2012.

Fan Gang, a well-known economist and director of the China National Economic Research Institute recently said in Han that "China has at least 30 years of high growth, and there can be no major crisis during this period. Real estate is always a pillar industry, and the residential market has basically achieved a soft landing. ".

Real estate is always a pillar industry. This argument surprised the author. Needless to say, the position and role of real estate in the current steady economic growth process. Why does real estate become a pillar industry at this stage? Of course, this is related to the historical stage of China’s urbanization process. China’s constantly urbanizing population may also support China’s rapid economic growth for many years, or it may continue to support the prosperity of the real estate industry. However, this cannot be a real estate industry that can always be a pillar industry. The basis.

A careful analysis of the real estate industry will reveal very Chinese characteristics. It can be said that many people have doubts about the development of the real estate industry. The first is land. At present, China’s land is owned by state-owned land, and developers’ land is mainly obtained from the government. However, the limited land for construction will inevitably lead to the occupation of other lands and the forced demolition caused by land acquisition. People’s doubts about the land system will increase. more. Second, the government's land finance model established by relying on low-cost land acquisition and high-priced land sales is not sustainable. Thirdly, rising housing prices allow the real estate industry to enjoy high profits. At the same time, it also becomes a densely capital-absorbed area. Capital flows to real estate at the expense of development opportunities in other industries. As a result, physical capital abandons industries. Entering real estate. Fourth, the high prices and real estate boom are at the cost of attracting residents' savings. A large number of mortgage loans on the one hand accumulate a certain amount of credit risk, and they also overdue the future residents' spending power and the stamina of China's economic development. Of course, the drastic demolition triggered by the profits will also lead to extreme polarization between the rich and the poor or directly affect the stability of society.

It can be said that the prosperity of real estate at the present stage is at the expense of staking. It can also be said that the prosperity of real estate at this stage is a serious overdraft for the future economic development. Some people say that this development model of real estate is originally built on an irrational basis. Why should we continue to make this unreasonable?

In fact, when we discuss the trend of house prices, can we reflect on these issues? Can real estate be a pillar industry of China's economy for a long time? Is it time for the land system or land finance to start reforming?

Of course, the current steady development of real estate and the slowdown in housing prices may temporarily be conducive to economic stability.

However, if real estate is regarded as a pillar industry of China's economy for a long period of time, China's economy will always be in a crisis and instability, because the decline in housing prices will affect GDP or employment, and housing prices will have a direct bearing on people's livelihood. Risks, in turn, affect financial stability. History also proves that real estate as a pillar industry will incur economic bubbles or financial risks. The author believes that real estate cannot become a pillar industry for a long time, and it is even less likely that it will never be a pillar industry.

At present, there are banks that house prices have fallen by 50%, and banks have been able to withstand it. It can be analyzed that the fall in house prices is not enough to trigger systemic financial risks. Since the banks are not worried about falling prices, the slowdown in housing prices will not bring shocking consequences to the economy. Of course, the slowdown in housing prices can also allow real estate companies to have more opportunities to self-adjust their development strategies.

Some people say that Vanke’s price cuts have a certain degree of demonstration. It is also said that the slowdown in house prices is an economic blessing. Maybe these arguments are not excessive.

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