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real estate has always been a topic of particular concern to the industry and the public.

and with the economy under pressure today, the issue of real estate is of paramount importance.

so, how should we view my country’s real estate market at present?

how should we solve the challenges and practical problems facing the real estate industry, and where will the real estate industry go?

where will the land finance that local governments relied on in the past go?

this series of questions is closely related to the wealth and future of each of us, and requires us to repeatedly question and think about them.

recently, we interviewed mr. meng xiaosu, former head of the national housing reform project and former chairman of china real estate group. the following is a condensed version of the interview, covering many key issues in real estate. i hope it will be inspiring to you if you read it carefully.

narrated by: meng xiaosu, former head of the national housing reform project and former chairman of china real estate group

the real estate industry cannot cure its own "disease"

ask:what has been your observation of the real estate market in the first half of this year? what are your thoughts on this?

meng xiaosu:the data for the first half of this year have come out. looking at the development of the entire chinese economy, many industries are doing well, with steady progress, but the real estate industry is currently the worst.

from january to july 2024, national real estate investment fell by another 10.1%, sales fell by 25.9%, and continued to decline. this decline is a new decline after two consecutive years of decline.

in 2022, real estate sales suddenly dropped by 5 trillion yuan, and then fell by another 6.5 trillion yuan last year. compared with the peak sales of 18.1 trillion yuan in 2021, this is equivalent to losing 5 to 6 trillion yuan in sales every year, which has also led to a decline in investment and an inappropriate growth in existing housing stock.

in addition, this has also led to many companies having no motivation to acquire land. recently, i saw some local governments put more than 200 plots of land up for auction, but in the end they told me that only two plots were negotiated.this situation continues to spread from the real estate industry to various industries, including more than 100 related industries such as building materials, home appliances, and decoration.

the role of real estate used to be positive, driving the development of these industries, but now it has become negative, "dragging down" the development of these industries.

but the problem is that these industries themselves involve a large number of jobs. if a real estate project is cancelled, a project department in the construction industry will be abolished and 20 employees will be laid off, which means that 1,500 migrant workers will be out of work.

this decline continues to be transmitted to local finances.failure to sell the land means no land transfer fee.for two and a half years in a row, the land transfer fees have been cut in half twice, from 8.7 trillion yuan in 2021, which can be considered the highest peak in chinese history, to more than 5 trillion yuan, and then to more than 1 trillion yuan in the first half of this year. if the second half of the year is also more than 1 trillion yuan, it means that not much land has been sold in a year, and a lot of this land is undertaken by the local government's urban investment companies. now private enterprises basically have no ability to acquire land.

i have always advocated that state-owned enterprises should withdraw from the market-oriented competitive real estate sector, but now it seems that without the support of state-owned enterprises, local governments may not even be able to sell land.

it can be said thatthe current "disease" of real estate cannot be cured by the industry itself. it is a comprehensive problem caused by various factors.originally there might not have been so many diseases, but 7 or 8 nurses from different departments took turns giving him injections, and finally the patient was half killed, which led to the final policy synthesis fallacy.

to solve the real estate problem, we cannot limit ourselves to the industry alone. the central government needs to attach great importance to it and translate it into cooperation from various departments and local governments. all sectors of society should pay attention and ultimately build a consensus.

treating the "disease" of real estate requires extraordinary measures

ask:what is the logic or reason behind the current situation of real estate?

meng xiaosu:historically, real estate has strongly driven china's economy, especially since the housing reform in 1998. the effect was not noticeable in the first two years, but it became noticeable in 2000. there is data to support this.

when the housing reform just started, china's gdp ranked 7th in the world. at that time, experts generally believed that china would only be able to become the third in the world by 2025 and the second in the world by 2050.

but unexpectedly, after the housing reform in 1998, china's economic development surpassed one country every two years on average in the first 12 years. in 2010, it surpassed japan to become the world's second largest economy. what force was behind this?

reform and opening up was the general background, and housing reform was an important measure in the reform and opening up. housing reform released a large amount of domestic demand, and combined with china's rapidly developing foreign trade at the time, a dual circulation situation was formed.

but from the perspective of the entire cycle, china's real estate industry has faced many difficulties since 2011. since 2011, china's economic growth rate has dropped from 9.5% to 7.9%, and then continued to decline to around 6% and 5%, and is now struggling to "maintain 5%.

what is the reason? it's the locomotive.(real estate)the engine is off.

what kind of problems occurred in 2011 that caused the real estate industry to lose its endogenous growth momentum?it is the purchase restriction policy and the loan restriction measures extended around the purchase restriction.

in 2013, i wrote an article criticizing this purchase restriction policy. after discussion, the new leadership decided to adopt a policy based on the city, which was better than the previous policy of restricting purchases in one go. however, due to talks with local governments, the policy was stopped, so you can see that the policy has been mentioned again in recent years.

it should be said that the real estate industry has been in a period of decline since 2011. before 2021, the real estate industry still experienced small cycle fluctuations within this timeline, but in 2022, due to excessive regulation, it has continued to decline until now.

there was a time,many people still mistakenly regard real estate as a "gray rhino", but in fact, what is a "gray rhino"? the wrong local regulatory policies are the real "gray rhino". so far, more than 100 industries represented by real estate and driven by it have encountered difficulties.

the decline was so deep that many industry insiders lamented that there would be no recovery without extraordinary measures.

ask:what exactly does this “extraordinary” measure refer to?

meng xiaosu:first of all, the first extraordinary measure is that the government should stop its chaotic actions and take positive actions instead.

continuing to implement the purchase restriction policy is abusive. the housing market has declined to this point. rich people don't buy commercial housing, but poor people don't have affordable housing. both effective demands are insufficient, which has led to a sharp decline in the housing market. but you don't have any other industries to replace real estate, so do you still want to continue to restrict people from buying things that they won't buy now?

as for active actions, we need to learn from the central government's approach. the central government has taken the lead in proposing some new measures, including financial measures, with the central bank providing money for re-lending. i believe that after a period of development, the effects of these policies will gradually emerge, and the long-term effects of this approach are more worth looking forward to. this is an extraordinary move.

second, increasing the construction of affordable housing is also an extraordinary measure.the central government has designated it as one of the three major key projects. in the face of huge losses of 5 trillion to 6.5 trillion yuan in commercial housing every year, how to protect the real estate and hundreds of related industries from being overly dragged down? at this time, another aspect of real estate that needs to be supplemented as soon as possible is:construction of affordable housing.

commodity housing and affordable housing are two sides of the same coin. they are interdependent and mutually supportive. the correct approach is to improve the two systems, namely, the housing market system and the housing security system.

in fact, there is still a shortage of affordable housing, especially for new urban families in cities. they are permanent residents, not registered residents, so no one has counted the data of this group of people for a long time.

some people say that there are enough houses. this is not true. the basis of their statistical data is wrong. they are counting based on the registered population of the city.

the third plenary session of the 20th cpc central committee has clearly proposed that permanent urban residents should be given the same treatment as registered urban residents, including social insurance, compulsory education, and housing security, which have raised several issues of concern to new citizens.

take the issue of housing security for example. since the central government requires you to target the permanent population, you cannot just consider the issue from the perspective of the registered population.

in addition, if we can start the construction of affordable housing when the entire real estate and commercial housing market is in a downturn, and invest 5 trillion or 6 trillion yuan each year in the construction of affordable housing, we can make up for the losses of the national economy in the real estate downturn.

so how to build it?

the central government will take the lead in investing 500 billion yuan, and local governments will match it. the government's investment will reach 1 trillion yuan. add to that the power of banks, trusts, funds, and social security, and it will be easy to reach 5 trillion yuan. 5 trillion yuan will be invested in the construction of affordable housing, without collecting land transfer fees and without being included in the cost of urban infrastructure construction. this will also be a huge boost to the construction and related industries.

therefore, i believe that when the commercial housing market is in a slump, on the one hand, we need to find ways to collect and store commercial housing and turn it into rental affordable housing. on the other hand, we need to vigorously promote the construction of affordable housing, which is also an important extraordinary measure.

will china’s housing prices continue to rise?

ask:this year, we have seen that except for some large cities such as beijing, shanghai, guangzhou and shenzhen, all other places have basically lifted the purchase restrictions. however, we have noticed that after these places were lifted, the entire real estate market did not seem to change much. do you think first-tier cities will fully lift the purchase restrictions? if so, what impact will it have on the property market?

meng xiaosu:from a policy perspective, we can see that there has been a significant shift.

in the past few years, real estate policies have been designed to suppress the market.find a way to stop ordinary people from buying too many houses.but now a series of financial policies are being introduced to support ordinary people in buying houses.this includes lowering the down payment ratio, lowering bank loan interest rates, and setting aside a portion of re-loans to support local governments in purchasing and storing commercial housing.

however, we see that administrative purchase restrictions have not been fundamentally removed, especially in first-tier cities, and people are paying attention.

take 2016 for example. under the central government's policy requirement of destocking the real estate market, beijing, shanghai, guangzhou and shenzhen took the lead in promoting the real estate market, which was then transmitted to strong second-tier cities, second-tier cities, and then to third- and fourth-tier cities. it quickly boosted the national real estate market, and then hundreds of real estate-related industries also took off.

the role of beijing, shanghai, guangzhou and shenzhen is a benchmark.recently, many second-tier and third-tier cities, and even new first-tier cities, have been liberalized. why is it that residents’ confidence is still not restored? they are still looking at first-tier cities as a benchmark.

many people may think that completely canceling the purchase restrictions is too stimulating. some experts also think that once the purchase restrictions are canceled, it will be troublesome. people from all over the country will move to beijing and shanghai. what should we do if the city is overcrowded with people?

but i am puzzled. china has been developing for so many years, and the purchase restriction has only been in place for the past 14 years. the populations of beijing, shanghai, guangzhou and shenzhen are all around 20 million. is it all due to the purchase restriction? new york in the united states, tokyo in japan...many major cities in the world do not have purchase restrictions. is it because they are overcrowded and the housing prices have skyrocketed?

therefore, there is no need to hesitate or be hesitant about lifting purchase restrictions in first-tier cities.as long as first-tier cities do not cancel or reduce purchase restrictions, people across the country will think that the original policies will return.therefore, the measures taken by first-tier cities have affected the entire country.

in fact, the overall market is still sluggish and the policy strength has not yet been fully demonstrated. even if all real estate policies are implemented, there will be a lag period of 9 months because of the process of housing output and digestion, not to mention that some of the current policies have not yet been implemented.

ask:so a lot of policies were issued, but some of them were not actually implemented?

meng xiaosu:the central government’s spirit is very clear, but not all of it has become policy.

for example, after the third plenary session of the 18th cpc central committee, many places said they studied the meeting, but that was just learning without any actual action. the third plenary session of the 18th cpc central committee emphasized increasing the construction of affordable housing, so you have to take some action, but there is no action. people keep saying that 8.7 million units have been confirmed for the 14th five-year plan, but the 14th five-year plan was confirmed in 2020 and will be implemented in 2021. when did the central government emphasize increasing the construction of affordable housing?in 2023, from now until now, it can be said that orders have been given repeatedly, but some places still stick to the old ways.

local governments need to take positive actions and not just maintain the current situation and wait for things to get better. the current real estate market is failing, so the government needs to take positive actions to address and solve the problems left over from the past.

ask:many people believe that china's housing prices have reached their peak. on the one hand, china's birth rate has declined, the population has reached its peak and is starting to decline; on the other hand, china's urbanization rate has also reached a bottleneck stage. what do you think?

meng xiaosu:the declining birth rate and slowing urbanization are both correct trends.

but we have to face the fact thatnow the permanent population of many chinese cities is placed here, but their problems have not been solved.andwith such a large population base, new families are constantly being generated. have you solved the existing stock problems?have you solved the problem of young people needing a house to get married?

not to mention the issue of growth, just the current problems will take at least several years or even a decade to solve. don't just fantasize about the future, solving the current problems is the key.

in fact, many experts do not really understand the data. they are limited to the registered population in cities, but my country's urban registered population is 681 million, and the urban permanent population is 933 million. they forget that these 252 million people are equivalent to 100 million families.

let’s not discuss in detail here when the household registration system will be abolished, but at least we need to be clear that you cannot forcibly create a dual structure in cities based on the existing urban-rural dual structure.

this doesn't mean that those who used to live in the city won't be taken care of.rather, it means that on the basis of maintaining the situation, we must also solve the problems of the middle and lower levels, especially the problems of farmers.

take medical insurance for example. urban residents have some protection, but farmers can only go back to buy the new rural cooperative medical scheme, which costs several hundred yuan a year and does not provide reimbursement for medical expenses in other places. these issues need to be resolved. farmers who move to the city are new citizens. this is the name recognition.

but apart from the recognition in name, have they really been recognized in terms of identity and public service? many cities may not consider these people as their own family, and even ordinary non-civil servants in the city are not considered as their own family.

so when it comes to building affordable housing, some cities say how much they have built in a year, but the people ask in return, who are you building it for? there is a reason why some online opinions mistakenly believe that affordable housing has become a privilege for some people.

similarly, have those who argue that the urbanization rate has reached its peak thought about the permanent population excluding the registered population? people around them may have several houses, but they don’t see that the delivery guys and the cleaning ladies still don’t have houses. so should they live in public housing? should they live in public housing?

today, many people will say that china's economy has hit its ceiling, urbanization has reached its ceiling, and real estate has also reached its ceiling. but just saying these few dry words is useless.have we solved the practical problems facing us? no, we still have to solve the problems that need to be solved in the end.

where is land finance heading?

ask:in your opinion, what is the current land finance situation?

meng xiaosu:it has already reached its peak. there will no longer be such high land transfer fee income in the future.i dare to say this.it would also be wrong to say that local government revenue in the future will not come from land.

the fiscal revenue of local governments in cities around the world still mainly comes from land.but their way of collecting money from land is different. it is through real estate tax. more than 20 years ago, our central government also proposed property tax and real estate tax, which were in line with housing reform. however, it has not been implemented for many years. as a result, local governments have gradually developed a set of informal land transfer fee policies.

the entire formation process was very slow. in the beginning, it was only a few hundred billion a year, and then it slowly increased to trillions and several trillions. the highest was 8.7 trillion a year.

the formation of land finance is also due to the implementation of the tax-sharing system to some extent. part of the local revenue needs to be handed over to the central government.the local governments did not have much left, but they had relatively large responsibilities, which left them with a space - selling land, so they gradually became dependent on land finance.

i have to say it again here that it is true that local government revenue mainly comes from land, but in the absence of property tax in our country, the government instead collects money from the other two largest groups and uses these funds for urban construction and maintenance of urban management.

the first is to collect money from farmers by acquiring land at a low price and selling it at a high price. in fact, this is also a scissors gap.two years ago, i learned a set of data. the land transfer fees in these years added up to 81 trillion yuan, but 2 trillion yuan was distributed to farmers, less than 3%. the remaining 79 trillion yuan was turned into urban management and urban construction. otherwise, where would so much money come from for urban construction in these years?

this means that while the city is booming, who is suffering? the farmers are suffering. at first, the land was collected for 20,000 yuan per mu, and then after a long time of collection, the price increased several times. however, when the land was sold in the city, it was sold for 2 million yuan or even 20 million yuan. this is a mistake in land finance.

the second mistake is, who were these high-priced houses finally sold to?they are new citizens, so the group with relatively low wealth accumulation will spend more money on buying a house in the end (old employees have already bought their houses and the value has increased). logically, farmers and new citizens should be the groups that benefit from policy care. on the contrary, those who already own houses in the city do not have too much cost, after all, they do not have to pay real estate tax.

therefore, land finance itself has structural defects. as the future moves forward, china should establish a standardized local tax system that takes money from land, so as to gradually reduce its dependence on land finance.

in fact, today even if you want to rely on land finance, you can no longer do so.

land finance is not coming back. some local governments do not realize this and instead of seeking reform and innovation, they begin to collect various non-tax revenues and impose fines. this is actually a manifestation of "lazy governance" and "inefficient governance". if this continues, the local business environment will be ruined. after a few years, all the companies will run away and the local area will be the victim in the end.and there are obviously other sources of tax, why not think about it?

ask:what is the tax source here?

meng xiaosu:

1. the first tax source: small-property houses are the first to be taxed

according to the current reality, there are a large number of small-property houses that do not constitute real property rights in the legal sense because they have not paid land transfer fees and other fees and have not received title confirmation and issuance certificates.

(according to the land administration law of the people's republic of china, small property houses cannot be transferred or sold to third parties who are not members of the collective, that is, they cannot be legally transferred after purchase. it also has a certain impact on the value preservation and appreciation of the house.)

the proportion of this part of small-property houses is already very large. it is estimated that it accounts for about 22-25% of the urban housing area, about 8 billion square meters, equivalent to 80 million units.

in fact, as long as the land transfer fee is paid, the small property house can be recognized as legal, and the value of the house will be assessed according to the commercial house in the same area. but can he afford to pay it all at once? he may not be able to pay it. in addition, after the land transfer fee is collected, there is a second problem -who should this money belong to?

at this time, the original farmers should come forward and say that the money should belong to our village. you did not expropriate the land in the past, but now you have just expropriated the land. according to the state council regulations, more than half of the land belongs to the farmers. you see, there is trouble again. there was nothing wrong in the world. originally, these farmers thought they were violating the law, so you just don't deal with them. now that the land transfer fee is collected, the farmers feel unfair, so the payment of the land transfer fee requires solving many disputes and problems.

butfrom the perspective of government taxation, you can solve these problems by levying real estate taxes.it is divided into annual periods. you pay a certain amount every year, and after paying, you will be on the same level as the real estate with existing property rights.and both the government that provides you with public services and the residents who purchase large-property houses are psychologically balanced.

and people who buy small-property houses are willing to pay, because they can afford it by paying it annually, and once they pay it, it becomes legal, and the value of the house increases exponentially.

for example, if your house (a house with small property rights) is worth 2 million yuan and the commercial house next to it is worth 4 million yuan, if real estate tax is levied on you and your house is declared legal, then your house is also worth 4 million yuan.

if we collect taxes from here, the amount will be huge. this tax will be paid in the form of land transfer fees. if we collect annual taxes at an average of 2.5% based on the international standard tax rate of 2% to 3%,then this property is worth about 80 trillion yuan, and 2 trillion yuan in taxes can be collected each year.

as for when to collect real estate tax on large-property houses, the government can explain it clearly to the people first so that they can be prepared. and even though there are many large-property houses and they are large in area, the tax rate must be very low, a few thousandths will be appropriate.

one more thing to mention here is how to levy real estate tax?i would like to add two thoughts:

first, collect the money when you see a house.real estate tax is levied on houses, not on people. all urban houses should pay tax. for example, if you have 2,000 houses in a community, there are 2,000 tax sources. this tax is easy to collect. it doesn't matter if the people are not there. they will put a ticket on you and say that you have gone abroad and will not come back. then, if you keep putting the ticket on it for a few years, you can auction it off according to the law. after the auction, keep the tax and wait for them to come and collect the rest. they will then appear.

this is the first step. do you think this step is fair or not? of course it is not fair because some people have only one house and some people have many houses. so one house is not fair.

so there is a second sentence: once you bear witness, you will retreat.for example, if you are a couple, you can get a tax refund for two houses, if you are single, you can get a tax refund for one house, and if you have elderly people at home, you can get a tax refund for three or four houses. in this way, every citizen can enjoy the tax refund, and it can also encourage people to treat marriage well and support their families.

2. the second tax source: commercial to residential conversion

the reason for the conversion of commercial buildings to residential buildings is not that real estate companies have built too many commercial buildings, but that local governments have made mistakes in approving land. there are two reasons why this is the case:

(1) the mistaken belief is that the more commercial land is granted, the more companies can be attracted, and that attracting investment can generate tax revenue every year. if only residential land is sold, no tax revenue can be collected after one sale. this is actually an illusion.

(2) due to real estate regulation, the supply of residential construction land is restricted. in order to collect land transfer fees, local governments sell a lot of land as commercial land.

here we take beijing as an example. since the real estate regulation began in 2011, the supply of commercial and residential land in beijing has begun to misalign.

according to past development ideas, residential communities generally have 7% commercial facilities and 8% service facilities, for a total of 15%, and no more than 20%.

as a result, since 2011, the approval scale of residential land and commercial land in beijing has been 100:100. by 2016, it had developed to 100:150, with the approved commercial land being 50% more than the residential land.

this leads to three situations: projects approved but not built, projects built but not completed, and projects built but idle, especially the third one.

so how do we solve these problems? we can change our thinking and be more flexible. do the commercial lands approved back then have to be commercial lands now or in the future? why can’t commercial lands be converted into residential lands?

a typical example of commercial-to-residential conversion is the trump tower in new york. historically, the trump tower was called the manhattan bank and was used for offices. later, the manhattan bank merged with another bank and no longer had any use for the building, so it was converted into a residential building.

it was easy in american history. china has no problem with technology now, but we are more rigid. local governments would rather not collect taxes than not have to guard these empty commercial buildings.

ask:if the local government promotes the conversion of commercial properties into residential properties, will it be worried about not being able to sell the land? the land finance is already on a downward trend.

meng xiaosu:now i want to tell you that,local governments can no longer sell land, but there is still a lot of financial revenue hidden in the conversion of commercial properties into residential properties.according to our survey in shanghai, the floor price per square meter for residential land is 45,000 yuan, while that for commercial land is 15,000 yuan, a difference of 30,000 yuan.

many core plots of land in shanghai are idle for commercial use. there is technically no problem in converting commercial use into residential use. these places have good locations, sufficient parking spaces, and gas. if commercial use is converted into residential use, the government can receive a land price difference of 30,000 yuan per square meter. this is called fiscal revenue increase.

moreover, "commercial to residential" not only allows local governments to increase their income from the land price difference in a steady stream, but also helps related developers ease financial pressure. the locations of these projects are good and sales can be successful, so developers can use the money to guarantee delivery of buildings and ease debt pressure.

according to our calculations, shanghai's office buildings can set aside 10 million square meters for commercial-to-residential conversion. if the land price difference of 30,000 yuan per square meter is collected, how much is that? 300 billion yuan. this is just for shanghai, and the total amount for all major cities across the country is several trillion yuan.

the key now is to find a way to save local finances so that local governments can maintain operations, wages and people's livelihood. now that land cannot be sold, it does not mean that there is no land finance, but it is not the same land finance as before.instead, we will excavate based on the existing stock, and it will take about 10 years.

these 10 years will just be the right time to promote the transformation of local governments. after 10 years, when real estate tax has been basically popularized, local governments will have a stable and continuous fiscal revenue.

3. the third tax source: affordable housing construction

in addition to these two, there is a third tax, which is the construction of affordable housing mentioned earlier.although affordable housing cannot generate land transfer fees, it has driven the development and employment of more than 180 related industries, which include various taxes, which total 20%.

it is not just one layer of taxation, but layers of taxation. employees' income has to be subject to personal income tax, suppliers' materials have to be taxed, and there is also the replacement of old home appliances and home furnishings with new ones. so if affordable housing is invested in every year, the country will invest 1 trillion yuan, including central and local governments, plus 5 trillion yuan in bank loans, which can generate about 1 trillion yuan in tax revenue each year.

real estate imperative

ask:the overall real estate market seems to be on a downward trend at the moment, especially with reports popping up online from time to time saying that the transaction prices of first-hand and second-hand houses in a certain place have dropped by several tens of percent. what do you think about this?

meng xiaosu:the difference between second-hand housing and new housing is that it is a transaction between ordinary people. it is the price that is finally reached through bargaining and compromise between buyers and sellers. therefore, in the market dominated by second-hand housing, housing prices rise and fall, which is a common phenomenon around the world.

when it comes to the decline in second-hand housing prices, it should be said that the biggest problem in second-hand housing is the foreclosed housing. now second-hand housing is pulling down new housing prices, and foreclosed housing is pulling down second-hand housing prices.

on average, foreclosed properties are auctioned at a 30% discount, but many still cannot be sold. there are also many that are sold at 50% or even lower than 50%, and some even fail to sell.

which groups of people are eligible for foreclosed properties?

they are ordinary people who have to auction off their houses. one type of these people are ordinary employees who are temporarily unemployed and do not have enough income to repay their mortgages. another type are people who have failed in their businesses. their houses are auctioned off, and housing prices begin to fall continuously.

as far as i know, under the current economic situation, the number of foreclosed houses is increasing. it should also be mentioned that the government does not have much intervention in the second-hand housing market, but it is capable of intervening in the issue of foreclosed houses, which has affected the overall situation and the lives of some ordinary people.

i think the government is capable of managing the current issue of foreclosed properties. i have a few suggestions:

the first is to allow ordinary people to postpone their loan repayments.this is actually very common, and many companies have already done this, so it can also be used as a reference for foreclosure houses. the extension can give ordinary people a break, and they may be able to get over it after two years of extension. this is a deferral of repayment, and interest will continue to be collected;

the second approach is called "interest-free deferral".some ordinary people have already been laid off and unemployed. it is meaningless to charge them interest at this time. just waive the interest and extend the repayment for another two years. you should know that these people are not unwilling to repay, but they are unable to repay. if you auction them off now, they will be homeless. some even signed personal unlimited liability guarantees with banks, but after selling their houses, they are still insolvent and still asked to repay. this has happened before.

the third approach is what the central government and the central bank have already introduced:use part of the central bank's re-loans to support local governments in purchasing existing housing.so when purchasing existing housing, can we include these foreclosed houses? aren’t they also considered existing housing? and when purchasing, we must maintain the price and not suppress it too much, so that the people can afford it.

the fourth approach was told to me by the president of a large bank.all banks have leasing companies, so why not temporarily transfer these foreclosed properties to leasing companies?(negotiate corresponding measures with the homeowner)? this way, the housing price will not impact the market.

in fact,the decline of the entire real estate market is not what the people themselves want. the decline of the real estate market has brought about an economic decline and the bankruptcy of many companies. it cannot be reversed by individual efforts.in this case, banks and courts may consider helping ordinary people. after all, they also consider the issue from the perspective of the people.

looking back at the overall situation, we should be positive about the changes in the entire market.there are still problems such as lack of confidence among people and unstable housing prices. under such circumstances, it is unrealistic to ask ordinary people to pay for buying houses.

i believe that it will take some time for the market to recover, but if the policies introduced are not strong enough and not truly implemented, and if first-tier cities continue to stick to purchase restrictions and do not change, the strength of these policies will be offset; if judicial auctions continue to disrupt the market, then the central government's goals of stabilizing the property market, housing prices, and expectations will be offset.

i still have good expectations for the development of china's economy and the future development of the real estate market, but a journey of a thousand miles begins with a single step, and we still have to take one step at a time.

we need to face up to the current problems affecting china's economic development and solve them one by one. only in this way can china's economy operate smoothly and achieve better development.