news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Click above"Mikuang Investment"

This real estate tycoon isRonnie Chan.

He is the "Godfather of Commercial Real Estate" who has been in the business world for half a century. He was once the chairman of Hang Lung Group and Hang Lung Properties, two Hong Kong listed companies. He was once known as one of the "Five Tigers of Chinese Real Estate" along with Li Ka-shing's Cheung Kong, Kwok Tak-seng's Sun Hung Kai, Cheng Yu-tung's New World, and Hu Ying-sheung's Hopewell Holdings. In short, he is a big shot in the real estate circle with both experience and strength.

Of course, many people will question the content of his speech, believing that since Ronnie Chan works in real estate, he is speaking for real estate business and that his words are biased.

It is obvious that he has a low vision when saying such things. As the boss of a real estate company, the vulgar opinions of the so-called economic experts and financial bloggers who are out there trying to attract traffic are completely different from his.

So what did he say?

There are three main points:

First, the current dilemma of China’s real estate market.

He said that China's real estate has only been developed for 30 years. It took China only about 30 years to go from a country without a real estate market to the world's largest real estate market.

Today, about 85% to 90% of Chinese people live in their own houses, but this does not mean that there is no new market. For example, there is new demand brought about by migration, the demand for replacing small houses with big houses, and the demand for replacing bad houses with good houses... the rigid demand still exists.

From this perspective, China's real estate is really remarkable. Because there is no market in the world that can produce so many houses for ordinary people in such a short period of time, which is very remarkable in the world.

Of course, this is related to the real estate developers' reckless and crazy expansion.Why has the real estate industry come to this point? What has created so many difficulties and challenges? It should be said that these have been accumulated over the past 30 years.

He summarized it into three points:

1. Excessive land sales.

In the short term, selling land can give the government money to build infrastructure, but if this is to be done in the long term, relying on selling land for a long time may be excessive.

2. How do developers buy land? How do they get loans? There are problems with supervision in this area.

A lot of corruption in the real estate sector arises from these two dimensions.

3. The government prevents bad companies from going bankrupt.

The path China has taken over the past 30 years has been to prevent small bubbles from bursting, which would eventually lead to a big explosion. However, the big explosion that was delayed until the end would have a huge impact on China's economy.

In fact, mankind has never seen anything like this in history. It is impossible for China's real estate to have such a long-term development without a major adjustment!

The above three reasons have created the difficulties and problems facing China's real estate today.

Second point, where is the bottom? What is the way forward?

He quoted Fan Gang's words, it's timeL-shaped bottom.

He said that we are now in a period of great change that has not been seen in a century. But this is not a problem for China, but a problem for the whole world, and this great change affects the whole world.

The core reason is that the United States wants to attack you.Now it is an all-round issue, including economy, technology, politics, currency, trade and other aspects. The largest country will suppress the second largest country.This is definitely a period never seen in human history where any country or any individual has ever been under such great pressure.

The third point is about the Chinese economy.

He said,The country has to make a choice between long-term strategy and short-term economic stimulus.

Therefore, many people do not understand. Because ordinary people do not pay attention to the long-term, but the short-term. They do not understand the long-term things. However, this is the future of the country's destiny.

But ordinary people live in the present. They care about their current feelings. They don't know that this is a major change that has not been seen in a century. The most powerful country in the history of the world wants to attack you.

I believe everyone has a deep understanding of this. (The following is my interpretation, not Chen’s speech.)

On the one hand, everyone can clearly feel that our country's international status has been visibly improved. We can even tell the United States to proceed from its strength. There are not many people in the international community who dare to speak loudly in front of us.

On the other hand, we have to admit that in recent years we can clearly feel that many people are becoming increasingly pessimistic about the future.

In the past, when the economy was booming, we always laughed at ourselves, acted submissively to the outside world, and would only criticize and protest when something happened, as if anyone could step on us. Now that the economy is becoming more pessimistic, our international status is still good.

However, no matter how much we talk about the rise of a great power, we can't help but feel resentful when we see our wallets shrinking every day.

That’s why some people call ourselves “ants in a prosperous age”.

So, there is a saying now that if the Eastern powers cooperate with them and are not so tough, the people will live a better life. You should have heard of this saying, right?

Can you really live a good life by giving in? Strictly speaking, yes, there are, such as China and Korea after World War II. But if you look at China and Korea now, they have indeed achieved rapid development for decades after relying on others, but to this day, they do not have the so-called independent sovereignty.

Moreover, as a great power, you cannot pretend to be a grandson, and even if you do, no one will believe you. A great power must seek to rise as a great power.

If a big country really acts like a grandson, it will eventually be dismembered, because you are the biggest threat to the boss yourself.

This has always been the case throughout human history: a dismembered and broken country has no happiness even for its people, only suffering.

Just look at the big goose today, it is a good example.

So, give up your fantasy, fight when you should. The Eastern great power has no option of compromise or submission. The manners of a great power with thousands of years of civilization are not something you can pretend to be a grandson of.

Well, that’s part of Chen’s speech. In general, his views are quite implicit. He acknowledged the great development of our country, but also acknowledged that China has encountered the biggest suppression problem. He said that short-term policies may not be satisfactory, but also said that the government is focusing on the long term, because ordinary people don’t understand at all.

So, be patient and wait. There is no good short-term solution. Our generation will not experience this. Even if the next generation is hardworking and able to endure hardships, they are just constantly giving blood transfusions to others.

Following Mr. Chen’s speech, let’s return to the current Chinese real estate market.

Let’s do some calculations first.

From the beginning of commercial housing transactions in China to today, the total amount of money spent by all people on buying houses is 180 trillion yuan.

Where did the 180 trillion go?

More than $35 trillion has gone into engineering projects, supporting the construction and raw materials industries.

More than 40 trillion yuan has entered residents' pockets through demolition.

More than 20 trillion yuan has been turned into national taxes and become part of national construction.

More than 20 trillion yuan is earmarked for the construction of urban and rural infrastructure, including water supply, electricity, and road construction.

More than 20 trillion yuan is used by real estate companies to manage costs and nourish upstream and downstream industries.

Another 15 trillion yuan will be recovered by financial institutions and invested in the next emerging industry.

Ultimately, the remaining money is the profit for the entire industry, about 10%.

When we sort out these data, we can understand more clearly what the real estate industry means in China and how much determination has been made to adjust the real estate industry in the past three years.

Then we will be able to be more clear that this industry will not disappear, and it will definitely support the country's next stage of high-quality development in a better state after its rebirth.

Of course, many people are worried about the future economic situation.

It's normal for you to worry, because the second half of this year may indeed be the most difficult time for our generation.

If you understand the real world situation, you will find that there has never been such a long period of large-scale peace in the history of mankind as we are now.

However, some things that have happened have actually foreshadowed that it is coming!

On the one hand, the recent epic collapse of the world economy, on the other hand, the two powder kegs have been ignited and there is no sign of stopping. Therefore, it is highly likely that our generation is destined to experience the test of the times.

If the world really undergoes a major reshuffle in the future, it will be impossible for us, as one of the core protagonists, to stay out of it.

It is impossible for us to sit back and watch the fire from the other side of the river.

So at this time, I have to ask you, are you financially prepared enough now?

Is this financial preparation just holding on to the cash and doing nothing?

Not at all!

The so-called cash is king, in fact, many people are single-threadedThinking, they simply don’t understand that the other side of cash being king is that they must hold on to high-quality assets.

There are many types of high-quality assets, among which high-quality real estate is the most important one.

Especially in the past two years, if you have a better way to make money, try not to show off your wealth. If you make money, you must use it to buy a good house in a good city and good location. This is better than anything else.

Don't be misled by some low-level words used to attract traffic.

For example, with China's aging population and low birth rate, demand will decrease and housing prices will naturally fall. They overlooked the fact that the uneven urbanization development and population mobility over the past 30 years have led to a strong siphon effect between Beijing, Shanghai, Guangzhou and Shenzhen. In the first quarter of 2024, the population of Shenzhen and Guangzhou continued to flow in, returning to a peak of 21 million. The demand for cities from the emerging population in strong core cities has never decreased.

What is the essence of real estate? It is a long-term bond of a city. When people buy a house, they are buying the quality of life, but also the possession of the city's resources and the dividends of urban development.

There is also a saying that buying a house is like working for the bank, and it is more cost-effective to live in public housing. This kind of statement is simply nonsense, treating banks as vampires and home buyers as slaves.

It is just as ignorant as many people who like to use the high and low data of residents' leverage ratio to deduce and judge.

If the house price rises from 1 million to 2 million, the original down payment of 300,000 and the debt of 700,000 will become the principal of 1.3 million and the debt of 700,000, and the debt ratio will drop from 70% to 35%.

Similarly, if house prices fall, 30% of the principal will be lost, and the original debt ratio will increase from 70% to 100%.

If you look at this issue statically, the conclusion is that if housing prices fall, household leverage will rise, and if housing prices rise, household leverage will fall.

Obviously, this conclusion is not true. Because the actual market is dynamic, homebuyers naturally chase rising prices and sell when prices fall, and they themselves do not know how to control their leverage.

This is actually just a question of investment time period. Principal and debt can be converted into each other, it is not static.

When house prices fall, more principal can be converted into more debt.

As house prices rise, more debt can be converted into more principal.

There are also some brainless remarks saying that those born in the 1990s and 2000s have chosen to completely lay low and will all live in public housing in the future.

In fact, as long as you give up the financial attributes of the house, it is not impossible for you to rent a house for your whole life.

It’s just that you are old, the only difference is whether you are a rural old man or a city old man.

Do you think that the rich and colorful retirement life of the elderly in big cities is just because they receive pensions?

Do you think that if the houses of rural old men could be sold for millions or even tens of millions, they would not be able to enjoy their old age?

Some people say that domestic housing prices are too high and we can choose to go abroad.

It sounds like you haven't done your homework. The current immigration policies in European and American countries require you to be either rich or a high-level talent, and not a troll who can't even afford a house in your own country. If you're not doing well in your own country, how can you still dream of having a good life overseas?

You have to admit that there are huge gaps in the world.

When Emperor Kangxi's nine sons were fighting for the throne, Germany implemented compulsory education. When Zhen Huan was busy fighting in the palace, France began to speculate in stocks.

The Taiping Rebellion broke out and the World Expo was held in London.

When the Qing Dynasty abolished the imperial examination system, Einstein proposed the theory of special relativity.

It's hard to believe that they happened on the same day.

Okay, next, what I write is very important.

Many people say that there is no cycle in the property market. In fact, we have always been within the cycle. Now the real estate market is actually in a large-scale pullback stage within the cycle. This kind of large-scale pullback occurred in 2008 and 2014.

But this time, it is experiencing the biggest pullback in nearly 20 years.

The market is now in a phase of large-scale retracement that is unprecedented in history. It is really difficult to reverse or change it because it requires two efforts. The first is to smooth out previous mistakes, and the second is to reverse the direction of this retracement.

So now the higher-ups have begun their second effort.

Previously, many people compared 2024 with 2015. Looking at the current trend, it is far from enough to only look at 2015.

The depth of this round of decline has already broken through history. I think we have to look back to 2008, or even earlier.

Because in the face of such an epic drop, if we want to restore the real estate market to a normal state, only a dramatic reversal can cure the current disease and make the economy better.

Serious illnesses require strong medicines.

Therefore, 2024 is far from enough compared to 2015, and we need to look earlier because the market situation is no longer the same as that in 2015.

THE END