Industry outlook for China's real estate market: there is still room for development in the future
2024-08-15
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China News Service, Lingshui, Hainan, August 14 (Reporter Wang Ziqian) China's real estate industry has entered a period of deep adjustment since 2022. After the high-growth era is gone, what will the property market look like? On August 14, industry insiders who were attending the "2024 Boao Real Estate Forum" in Lingshui, Hainan believed that there are positive factors in the current real estate market and the industry still has room for development in the future.
In the first half of this year, China's real estate regulation policies were frequently issued, and the real estate market showed positive signs. Recently, the decline in key indicators such as commercial housing sales area, sales volume, and new housing construction area has narrowed, reflecting the improvement of market activity.
"Since 2024, the overall real estate policy has been to promote market recovery and stability. Policies such as canceling the lower limit of loan interest rates and lowering the down payment ratio have further promoted the release of demand." Cai Yun, secretary-general and researcher of the Commercial, Cultural and Tourism Real Estate Committee of the China Real Estate Association, said that China's real estate industry is building a new model of high-quality development with urban renewal, construction on behalf of others, and leasing as a new system. For example, industrial cities and logistics are the main platforms and bridges for developing new quality productivity; commercial real estate and retail are the main battlefields of the "great era of consumption."
Fan Gang, vice president of the China Economic System Reform Research Association, believes that China's real estate market will still experience a period of lows and it will take time to repair the market, but everyone knows where the problem lies. Ronnie Chan, honorary chairman of Hang Lung Group and Hang Lung Properties, said that after adjustments, the real estate market will develop more rationally and healthily.
The guests at the meeting believed that there is still room for development in China's real estate market, one of the reasons being that China's urbanization has not yet been completed. Official statistics show that China's permanent population urbanization rate will be 66.16% in 2023, and it is still in a period of rapid urbanization.
Fan Gang said that the migration demand of the population in the process of concentration in cities will provide impetus for the future development of China's real estate market. He suggested that urban agglomerations be strengthened through household registration reform and improvement of public services, so as to achieve complementarity between large, medium and small cities and absorb more population to increase demand for housing.
Lu Ting, chief China economist at Nomura Securities, also believes that China's urbanization is far from complete, and the real estate industry has not seen an absolute overcapacity. The key to the future is to correct the distortions such as high housing prices caused by past market bubbles. He said that the next step is to do two things well: one is to clear out, repair the credit chain with the core of guaranteeing the delivery of houses, and rebuild market confidence; the other is to reform, linking factors such as land allocation, transfer payments, and population inflow through policies.
"The industry has undergone deep adjustments, but it does not mean the end of its life cycle." Tang Xiang, deputy general manager of Poly Developments and Holdings Group Co., Ltd., said that after the industry's production capacity is cleared, concentration will increase significantly, corporate profits are expected to be restored, and development will be more stable.
At present, Chinese real estate companies are promoting the coordinated development of the entire industry chain by strengthening market coordination and creating new profit growth points. Tang Xiang believes that the real estate industry is facing the dual opportunities of explosive development of AI technology and rapid increase in industry concentration. "Emerging technologies penetrate into the management chain of the industry, which can enable companies to produce more efficiently, match customer needs more accurately, and form new product competitiveness." (End)
