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Interface News Reporter | Wang Tingting

"All the problems that should be exposed have been exposed. After this stage, there will probably be a relatively stable stage that will start to improve." On August 14, Fan Gang, vice president of the China Economic System Reform Research Association and dean of the China Shenzhen Institute for Comprehensive Development, a national high-end think tank, said this when delivering an economic speech at the 2024 Boao Real Estate Forum.

Fan Gang believes that from a macroeconomic perspective, China's economy is still in recession, with a growth of 5.3% in the first quarter and only 4.7% in the second quarter. Various problems are still being exposed, downward pressure is still huge, and there are still many uncertainties.

As far as real estate is concerned, we have indeed reached or are close to the bottom. After the bottom, there is still a stage of crawling at the bottom, which is an "L" shape, and we will go through a difficult period.

Everyone knows where the problem lies, including the fact that a large amount of wealth is concentrated in the real estate market and that the real estate market is full of commercial housing.

In Fan Gang's view, healing takes time. A crisis or a fluctuation will not pass in one or two months or one or two years. Problems accumulated over 40 years will probably take some time to repair. In this process, many companies will be eliminated and internal restructuring will be achieved. This is happening in countries around the world.

"The development potential of the real estate market in the next stage lies in urbanization." Fan Gang believes that in the later stage of China's development, large and small urban clusters will be formed. Large cities will complement small and medium-sized cities. Small cities will provide spatial complementarity for large cities, and large cities will provide public service complementarity for small and medium-sized cities.

Judging from the current real estate situation, it is time to seriously promote the urbanization process. At the same time, we also look forward to the release of documents from various places to accelerate the urbanization process.

In his view, the process of urbanization is not just about the rigid and improvement demands of people in the city. An important demand in the urbanization process is called migration demand.

On the one hand, farmers need to move to cities, from rural areas to cities, which is the migration demand. "The migration demand is a superimposed demand. All our farmers have homesteads and houses, and they are big houses, but they don't live there anymore, or they only go back to live there for a few days a year. Then they move to the city and need a house in the city."

Fan Gang said that the development of urban agglomerations and urban belts should be encouraged, and through more convenient transportation, large cities will drive the development of small and medium-sized cities, and even surrounding villages. In these urban agglomerations and urban belts with concentrated populations, there is a "demand for migration housing", and the real estate market will have a normal development state.

In addition, Fan Gang believes that in the past, China's housing demand was mainly solved through market-oriented means, which met the housing needs of many people but did not take into account the housing demands of low-income groups.

On the one hand, housing for low-income groups has become a problem; on the other hand, government departments dare not completely let go and realize marketization, because if they do so, housing prices may become higher and higher, and housing anxiety among low-income groups will become more and more serious.

"Compared with some countries or regions, the supply of welfare housing such as affordable housing and public rental housing in China is still insufficient, and the supply of affordable housing should be increased moderately," said Fan Gang.

Currently, many places are stepping up the construction of sales-oriented and rental-oriented affordable housing. According to data from the Ministry of Housing and Urban-Rural Development of China, as of the end of June, 1.128 million units of affordable housing had been built and raised nationwide, accounting for 66.2% of the annual plan of 1.704 million units, with an investment of 118.3 billion yuan.

Nowadays, the construction of affordable housing systems in various places is also being continuously promoted, and the management of affordable housing is being standardized. Since July, Zhengzhou and Kunming have both issued management measures for allocated affordable housing, clarifying the objects of protection and the management of allocation prices, while Guangzhou and Hefei have issued relevant drafts for soliciting opinions.

Industry insiders pointed out that in the future, it is necessary to strike a balance in the "market + security" system, and at the same time actively carry out the work of purchasing existing housing for use as affordable housing. While solving the problem of affordable housing supply, it is also necessary to digest existing properties on the market side and resolve risks.

With the support of a series of policies, local governments have recently stepped in to "collect houses". Fan Gang believes that this is an important means for state-owned capital to "stabilize the economy".

Some countries use bond issuance to stabilize their economies, but China has done relatively little in this area. "Our advantage is that we have a relatively large amount of state-owned capital. As public capital, its important function is to provide public goods and increase public interests. The essence of local platforms' housing storage is to give full play to the role of state-owned capital in 'stabilizing the economy', which is also what state-owned capital itself should do," said Fan Gang.