Real estate is to incite domestic demand fulcrum to save the economy, is it necessary to save housing prices？
Ten years ago, one of the fulcrums to incite domestic demand was real estate, and it will still be ten years later. However, the previous reliance was on the commercial housing market, and this time the foothold will be affordable housing.
"After buying a house for two years, business tax will no longer be levied, and the strength of the policy exceeds market expectations." On the evening of 17th, a real estate agent manager in Shanghai couldn’t hide his surprise on the phone. Stunned. On that day, the the State Council executive meeting just studied and determined three measures to promote the healthy development of the property market.
The central government has also reserved a lot of space for local governments to "rescue the market": all regions should adjust measures to local conditions and "further adopt policies and measures to promote the healthy development of the real estate market".
Looking back on 2008, from the intensive control object of macro policy to being positioned as "an important pillar industry of national economy" again; From trying every means to stabilize the soaring price and cool down the investment speculation, to using credit and tax policies to stimulate demand by all means; From queuing up all night to freezing sales. The real estate industry has gone through this year. How to treat the adjustment of building administration? Do we have to save the property market to save the economy? Must the house price be guaranteed to save the property market?
Do we have to save the property market to save the economy?
Some people even doubt the "justice" of saving the property market. In this regard, financial columnist Wu Xiaobo said, "The government has its moral justice to save the market at this moment."
On December 10th, Morgan Stanley Research Department released the latest economic research report on China, and held that the typical feature of China’s economy in 2009 was "deterioration followed by improvement", but real estate investment was the biggest uncertain factor to judge the growth expectation in 2009.
In the composition of fixed assets investment in the whole society, real estate investment, which is closely related to more than 50 industries, ranks first in the world. As of July 2008, the sum of electric power, heat energy, transportation and water conservancy environment accounted for less than 25% of fixed assets investment, manufacturing investment exceeded 30%, and real estate investment accounted for more than 33%. This determines that infrastructure investment alone is not enough to prop up economic growth, and pure government investment is also difficult to make up for the decline in real estate and manufacturing investment.
Not to mention the dependence of local finance on real estate. Taking a district of a city in the east as an example, the fiscal revenue in 2005 was 12.4 billion yuan, of which 6.4 billion yuan was turned over to the city and the central government, and the local disposable fiscal revenue was 6 billion yuan; Among them, 2 billion yuan must be "rewarded" to industrial enterprises according to the investment agreement, and the local actual disposable tax revenue is 4 billion yuan. The tax revenue contributed by the real estate industry in that year (including central tax and local tax) reached 2.8 billion yuan, as well as 1.2 billion yuan of supporting fees for large real estate municipalities collected by hitchhiking and about 2 billion yuan of land transfer fees in that year, which were not included in the fiscal account and were used outside the system. In this way, among the 7.2 billion yuan of government funds actually available at the district and street (township) levels, the real estate industry has created more than 5 billion yuan.
In this case, re-boosting the real estate industry has become an important choice to promote investment and protect the economy. Real estate has been promoted to "an important pillar industry of the national economy" and "affordable housing project" has been listed as the first of the "Ten National Articles", so the policy mix clearly conveys the orientation that "saving the economy must save the real estate first" and "promoting investment cannot be separated from stabilizing the property market".
"I wonder, what are the similarities and differences between starting domestic demand under the financial tsunami in 2008 and stimulating domestic demand under the Asian financial storm in 1998?" Hu Yijian, a professor at the School of Public Economics and Management of Shanghai University of Finance and Economics, said, "Ten years ago, one of the fulcrums to incite domestic demand was real estate, and it will still be ten years later. However, the previous time relied on the commercial housing market, and this time the foothold was affordable housing. "
Must the house price be guaranteed to save the property market?
As the year draws near, developers are even more hungry for funds, and discount promotion patterns are constantly being refurbished. In Changsha, Hunan Province, there is even a developer’s activity of "buying facial cleanser and sending it to the house". A real estate agency negotiated with the developer to launch a sales model: citizens buy facial cleanser, liquor and other consumer goods through the company, and every time they spend more than 1,500 yuan, they will give a 1 square meter house, buy more and send more. After making up a house area, you can exchange it for a house from the developer.
How to fully release the normal housing consumption demand? The fundamental point is to improve purchasing power. There are two ways to improve purchasing power. One is to increase income, which is almost impossible when the economy enters the downward cycle. The second is to reduce housing prices, which is the most practical way at present.
Different from the expectations of a few wealthy people when they invest in housing, a large number of working-class people consume housing based on reality. As long as the house price is adjusted back to its purchasing power range, or even "within reach", they will enter the market. When the real estate market is a consumer market, the most important issue for housing buyers is their ability to pay rather than their confidence. Recently, some properties of Country Garden, a real estate tycoon, are selling well in a weak market. One of the important reasons is that they are low in total price and high in cost performance. In recent years, the prices of some high-quality properties developed by Country Garden are close to the prices of affordable housing. The example of Country Garden shows that only standing on the basis of consumers’ purchasing power can bring lasting demand for the property market.
Professor Yin Bocheng, an economist, believes that since the Central Economic Work Conference clearly stated that "reducing the burden of residents’ reasonable purchase of self-occupied ordinary commercial housing and giving full play to the positive role of real estate in expanding domestic demand", it is time to return to the origin of purchasing power to observe the property market problem.
As for the tax rebate for buying houses, which is widely circulated in the market at present, it is only attractive to high-income people. Our reporter once asked two high-income earners whether they would consider buying a house if the principal and interest paid by the purchaser to the bank were deducted from the personal income tax base. A professor from Shanghai University of Finance and Economics replied: It depends on the deduction time. If the deduction time is long, you will consider investing in real estate; If there is no tax rebate incentive, I will not consider buying a house now. Because he already has three houses, he just sold one in early 2008. A president of a securities company who began to be laid off in the second quarter of 2008 replied: If the tax is refunded, I will not be in a hurry to receive my salary and bonus in the first quarter of this year, and I will receive it after deducting the purchase of a house. Obviously, the tax rebate policy for purchasing houses that has been introduced in Chongqing and other places is effective in stimulating real estate investment, but the side effect is that it may continue to blow up the bubble and bring new injustice.
"Stable transaction volume" or "stable house price"?
The Central Economic Work Conference proposed that one of the key tasks of economic work next year is to "maintain the stable and healthy development of the real estate market". Is the key to stabilizing the property market to "stabilize the transaction volume" or "stabilize the house price"?
This must be clear about the real estate market, what is the first need of the current government? It is real estate investment that drives economic growth and the jobs it creates, followed by taxes and land transfer fees from the real estate industry. In other words, for the government, it is more important to maintain high real estate turnover than to maintain high housing prices. Only by appropriately lowering the price in exchange for the transaction volume can the real estate investment continue, because the inventory is counterproductive to the investment. The more vacant stock houses, the smaller the prosperity of future investment, and the terminal sales volume is the first factor to ensure the investment to run. If the sky-high price is low (as has happened in some cities since the third quarter of this year), the so-called price has no market and the sales freeze will force the investment to drop sharply. In the end, the government can neither get taxes from real estate nor even guarantee jobs.
In a word, the root of stimulating domestic demand with real estate consumption is to reduce prices, run volume and pull investment to drive employment and protect the overall situation.
From this perspective, we can correctly understand why the Central Economic Work Conference proposed that "the desire of residents to improve their living conditions reasonably should be combined with the role of real estate as a pillar industry", that "the supply of affordable housing should be increased, the burden of residents’ reasonable purchase of self-occupied ordinary commercial housing should be reduced, and that real estate should play an active role in expanding domestic demand", and that the the State Council executive meeting on the 17th called for "guiding real estate development enterprises to actively respond to market changes and promote the sale of commercial housing" in studying and deploying policies and measures to promote the healthy development of the property market. (Reporter: Xu Shousong)
The State Council issued several opinions on promoting the healthy development of the real estate market.
On the 21st, the General Office of the State Council published "Several Opinions on Promoting the Healthy Development of the Real Estate Market" on the Chinese government website. The opinion puts forward that the construction of affordable housing should be strengthened to further improve the living conditions of the people and promote the healthy development of the real estate market.
The State Council executive meeting deployed measures to promote the healthy development of real estate market.
Wen Jiabao, Prime Minister of the State Council, presided over the the State Council executive meeting on 17th to study and deploy policies and measures to promote the healthy development of the real estate market.
The central bank and the China Banking Regulatory Commission jointly issued measures: the interest rate of low-rent housing construction loans will drop by 10%
On the 17th, the central bank and the China Banking Regulatory Commission jointly issued the Measures for the Administration of Low-rent Housing Construction Loans, which stipulated that the interest rate of low-rent housing construction loans should be lowered by 10% according to the benchmark interest rate of loans of the same grade in the same period published by the People’s Bank of China.
The National Development and Reform Commission issued a central subsidy of 10 billion yuan for the construction of affordable housing.
According to the introduction of the National Development and Reform Commission on the 17th, the National Development and Reform Commission recently issued a 10 billion yuan central subsidy investment plan to speed up the construction of low-rent housing and the renovation of shanty towns in state-owned forest areas, reclamation areas and coal mines, as well as to expand the pilot renovation of dilapidated houses in rural areas.
Supporting the bottom, activating and working together-interpretation of three key words of the new policy of the property market
"At present, we must adhere to the basic direction of housing marketization and the principle of implementing the housing security system for low-income people with housing difficulties …"
The two "Persistences" clearly put forward by the the State Council executive meeting on 17th not only show the government’s determination to increase the construction of affordable housing, but also show the attitude of adopting more active economic policies to activate the ordinary commodity housing market.
Xinhua Viewpoint: Communication on Policy Adjustment of Current Real Estate Market
"Everything is available, and the policy is strong, exceeding market expectations." On the evening of 17th, an account manager of Daning Store of Zhongyuan Real Estate could not conceal his surprise on the phone. "Business tax will not be levied after buying a house for two years, but we thought it would take at least three years."
The government has made all-round moves to stimulate the property market experts to interpret the four new policies in detail
Yesterday (17th), Premier Wen Jiabao of the State Council presided over the the State Council executive meeting to study and deploy policies and measures to promote the healthy development of the real estate market.
The transfer of houses over two years will be exempted from business tax, and the urban real estate tax will be cancelled.
The Central Economic Work Conference, which ended on the 10th of this month, proposed that "the supply of affordable housing should be increased, the burden of reasonable housing purchase should be reduced, and the role of real estate in expanding domestic demand should be brought into play". Yesterday (December 17th), the the State Council executive meeting determined three measures to speed up the construction of affordable housing, encourage housing consumption and maintain a reasonable investment scale in real estate development.
Year-end feature: three key words outline the confidence curve of the property market in 2008
2008 is destined to be an extraordinary year for both the world and China.
At the beginning of the year, Wang Shi first threw out the "inflection point theory"; As the tide of price reduction began to sweep across the national property market, in some cities with large bubbles, the phenomenon of supply interruption began to appear; What makes developers more stressed is the unprecedented calm wait-and-see attitude of home buyers. The continued downturn in the transaction means that the real estate market has fallen into a period of deep adjustment.
The Blue Book looks forward to the real estate market in 2009: it will enter a long adjustment period.
China Academy of Social Sciences pointed out in the 2009 Blue Book of Economy published in Beijing on the 2nd that the real estate market will enter a long adjustment period in 2009 under the influence of international and domestic economic situation and national macro-control policies.
Year-end feature: The era of high housing prices is drifting away.
Similar to the trend of the securities market, the real estate market in China has also cooled rapidly from the "boiling point" at the beginning of this year. Up to now, the market depression is still continuing. Although since the fourth quarter, the government has stepped up efforts to rescue the market, and the real estate market in major first-tier cities is slightly warming up, there are indications that some leading indicators of the real estate market are still not very optimistic.
Editor: Wang Jiaolong