What is the root cause of China s real estate boom

Here are some of the reasons why house prices may fall significantly:

1.Regulatory policies: In order to control housing prices, a number of strict regulatory policies have been implemented, such as purchase restrictions, loan restrictions, and programs. These policies have limited demand in the real estate market, leading to a rise in housing prices.

2.Impact of the pandemic: The pandemic has had an economic and social impact, leaving some people facing unemployment and declining incomes. At the same time, the epidemic may also cause many people to temporarily abandon their home purchase plans, resulting in an oversupply of homes and triggering an imbalance between supply and demand in the market.

3.Changes in investment mentality: With the change of national investment philosophy, more and more people have begun to recognize the risks and limitations of real estate investment and choose to explore other investment areas.

This could create a larger-than-expected pressure on supply and demand in the market, pushing house prices downward.

4.Urban population mobility: Urban population movement will have a significant impact on housing prices, and if the urban population decreases, the demand for housing will decrease, and housing prices will naturally **.

5.Macroeconomic situation: Under the current macroeconomic situation, there are ups and downs, and the global situation and domestic policies and other factors are uncertain, which may have a certain impact on the market, which will lead to large fluctuations in housing prices.

It should be noted that the real estate market is a complex market, and the reasons for the change in housing prices are not only the above points, but also affected by other factors.

Personally, I think that the main reasons for the current housing prices are as follows: First of all, the national policy regulation and control have been strengthened.

Recently, various cities have successively introduced policies to control housing prices, such as purchase restrictions, loan restrictions, and increased down payment ratios. These policies directly limit and curb house prices**.

2.Homebuyers expect change. In the case of intensive policy introduction, home buyers expect that housing prices will continue to be **, so they will choose to wait and see, unwilling to enter the market. This has led to a drop in the number of transactions in the real estate market, forcing developers to sell at a lower price.

3.There is a serious imbalance in the supply structure. The real estate market has a long-term problem of oversupply, and this policy regulation has further increased the supply pressure, resulting in a large backlog, and developers can only sell out by constantly reducing prices.

4.Monetary tightening month-on-month. In recent years, the central bank has adopted a tightening of monetary policy, which will lead to a tightening of social funds and make it more difficult for banks to supply funds for real estate projects. The increase in the cost of capital will be directly passed on to housing prices.

5.Aggregate demand declined. The slowdown in macroeconomic growth and the decline in residents' spending power and willingness have led to a contraction in aggregate demand for real estate. In the case that the supply is difficult to adjust quickly, ** can only go down.

6.Investor sentiment has suffered. Real estate is regarded as an important investment channel, and the recent housing prices continue to be high, and investment expectations are sluggish, which makes investors pessimistic and unwilling to enter the market, further promoting the decline of housing prices.

Good evening, dear and honored to answer your <>

The reasons for the take-off of China's real estate and the logic behind it. Answer: Personally, I think there are three main reasons for China's high housing prices:

1. The demographic dividend brought about by China's urbanization process. At present, the population of the main force driven by real estate has been growing steadily, and the correlation with the growth of the house price index is not so high. However, I am convinced that the reason for the rise in housing prices in big cities is inseparable from the effectiveness of education in China, and it is also in line with today's industrial structure reform.

Now that China's industrial structure is tilted towards the tertiary industry, more and more people are getting advanced education, and the talent attraction effect of big cities is brought into full play. More and more people are heading to big cities, and people even see houses as a sign of establishing themselves in big cities. Second, China's capital market is not perfect, and it cannot be used as a barometer of the economy.

Although GDP is ultimately driven by technological progress, it is undeniable that China today is mainly driven by capital. China's ** market is a speculative market, basically no investment value, this is because China's capital market has just been liberalized, and there is not a big gap with some developed capital markets in the West for many years. In the case that the Chinese have no ** market to invest, only real estate is the only way to invest, so China's GDP machine must rely on real estate to pull.

3. Legacy of China's land finance. Land is one of the ways in which local fiscal revenue is normal. Real estate is undoubtedly a huge cash cow for ** and real estate developers.

If you can't make money, there is no way to talk about transfer payments, which is a major event related to people's livelihood.

Summary. ** If you have money, you will engage in infrastructure construction, introduce preferential policies, attract a large number of enterprises to settle in, and realize the so-called "investment promotion". These enterprises provide a large number of jobs and attract a large number of migrant workers.

Once the population increases, the demand for housing will rise rapidly, and the commercial land will be sold to developers for the construction of residences, shopping malls, entertainment venues, etc. As the cycle continues, the population is increasing, the urban development is getting better and better, the land price is getting more and more expensive, and the housing price is getting higher and higher!

The essence of housing prices** is "wealth transfer". Domestically, every economic crisis is an opportunity for a redistribution of wealth. The reason is that due to the economic crisis, everyone's income has decreased, but prices and housing prices have increased.

If we analyze it further, every time money is released, wealth will be transferred to the rich first. Because the rich have assets, the banks give priority to the lend to them in order to minimize the risk.

Is there anything else. Land finance is only clearly impoverished, which is the superficial driving force for housing prices and rapid economic development. The real driving force behind the crazy housing prices in China** and the great changes in the entire economy is "land finance"! Radical thoughts.

Land finance is a long-term credit, which should be secured by land to provide bridge protection for financing. There are roughly two types of economic development: capital growth and operational growth, which are also two phases.

Capital growth is the primitive accumulation of fixed assets, which requires positive capital income minus capital expenditure to achieve economic growth; Business growth is a way to achieve economic growth by means of business to achieve a positive number of operating income minus operating expenses. The primitive accumulation of fixed assets in China is, simply put, infrastructure, or "infrastructure". In recent decades, we have only heard the slow roar of machines and the exclamations of countries around the world!

Is the infrastructure fast? Quick! Return as fast as a rocket launch!

So where does the money come from? Sell land for rent! But not all, most of the money actually comes from banks!

The logic of land transfer is: to rent industrial land at a low price, not only to provide low-cost industrial land, but also to provide "seven links and one level" through the way of policy incentives, that is, access, water, electricity, drainage, heat and electricity. Edge Oak Telecom, Gas and Land Grading.

** If you have money, you will engage in infrastructure construction, introduce preferential policies, attract a large number of enterprises to settle in, and realize the so-called "investment promotion". These enterprises have provided a large number of jobs and attracted a large number of migrant workers. Once the population increases, the demand for housing will rise rapidly, and the commercial land will be sold to developers for the construction of residences, shopping malls, entertainment venues, etc.

With the continuous cycle, the population is increasing, the city is getting better and better, the land price is getting more and more expensive, and the housing price is getting higher and higher!

With the continuous increase of the country's macroeconomic regulation and control policies, China's economy will maintain sustained and stable growth. In the near future, land finance will inevitably withdraw from the stage of history. China's housing prices are likely to continue to grow slowly, but they will certainly remain manageable.

As national incomes continue to rise, house prices will eventually return to acceptable levels.

In the context of the gradual recovery of the economy, the main reasons for the large decline in housing prices are as follows:

First, the policy is tightened.

In recent years, local governments have successively introduced a number of regulatory policies, including purchase restrictions, sales restrictions, price restrictions and other policies.

The implementation of these policies has increased the cost of investing in real estate, limiting the development of the real estate market. In addition, policies such as expanding housing and reducing the number of immigrants have also affected this.

Second, inventory pressure.

The inventory pressures faced by property developers in recent years have also contributed to the large decline in house prices. Real estate developers in some second- and third-tier cities are overly reliant on real estate loans and have not effectively controlled inventory, resulting in high inventory pressure. This situation has forced developers to participate in ** competition, which ultimately leads to a decrease in housing prices.

Third, demand is weakening.

The slowdown in economic growth, manifested in the persistence of a weak job market and sluggish consumption, has led to a relative decrease in the number of people who need to buy a home. With the decline in demand, the situation of oversupply has become more and more serious, resulting in the general price of silver sedans.

As mentioned above, the reasons for the current large decline in housing prices involve factors such as market supply and demand, policy restrictions and inventory pressure on developers. We should conscientiously regulate and control the market, strengthen policy guidance, and promote the stable and healthy development of the market, so as to achieve sustainable economic development.

Clause. 1. Completion of real estate development investment.

From January to February, the national real estate development investment was 1,366.9 billion yuan, a year-on-year decline; Among them, residential investment was 1,027.3 billion yuan, a decline.

From January to February, the construction area of real estate development enterprises was 7,502.4 million square meters, a year-on-year decrease. Among them, the residential construction area was 527695 million square meters, a decline. The new construction area of cracked houses was 135.67 million square meters, a decline.

Among them, the area of new residential construction was 98.91 million square meters, a decline. The area of housing completions was 131.78 million square meters, an increase. Among them, the area of residential completions was 97.82 million square meters, an increase.

Clause. 2. Commodity housing sales and for sale.

From January to February, the sales area of commercial housing was 151.33 million square meters, a year-on-year decrease, of which the sales area of residential buildings declined. The sales of commercial buildings were 1,544.9 billion yuan, declining, of which residential sales increased.

At the end of February, the area of commercial housing for sale was 655.28 million square meters, a year-on-year increase. Among them, the area of residential buildings for sale increased.

Clause. 3. Funds in place for real estate development enterprises.

From January to February, the funds in place for real estate development enterprises were 2,133.1 billion yuan, a year-on-year decrease. Among them, domestic loans were 348.9 billion yuan, down; the use of foreign capital was 500 million yuan, a decrease; self-raised funds were 634.2 billion yuan, a decrease; deposits and advance receipts were 711.2 billion yuan, a decrease; personal mortgage loans were 349.5 billion yuan, a decline.

Clause. Fourth, the real estate development prosperity index.

In February, the real estate development prosperity index (hereinafter referred to as the "national housing prosperity index") was.

Residential investment fell in January and February this year, which is a very significant decline, and the reason for this can be considered from the perspective of the general economic environment and residents' income.

First of all, the economic environment has a big impact on residential investment. With the unstable situation in the global economic situation, there has also been some volatility and uncertainty in China's economic growth, which has led to increased concerns among potential home buyers about the future economic prospects, and many have reduced their real estate investment as a result. In addition, the outbreak of the new crown epidemic and the global economic downturn have also had a big impact on residential investment.

During the pandemic, many people were forced to postpone buying a home due to economic uncertainty and quarantine restrictions, which led to a decline in residential investment.

Secondly, residents' income is also an important factor affecting residential investment. With unstable wages and uncertainty in the job market, many people's plans to buy a home have been affected. In the context of economic fluctuations and the impact of the epidemic, some people may choose to postpone the time spine talk of buying a house to wait for the recovery of residents' income and the stability of the economic environment.

In addition, some people may be forced to abandon their home purchase plans because of housing prices**, which will also have a negative impact on residential investment.

Overall, the decline in residential investment is due to a complex interplay of factors. With the ever-changing global economic environment and the uncertainty of China's economic growth, the real estate market may face greater challenges in the future. Therefore, ** and real estate developers need to take steps to mitigate the negative impact of the decline in residential investment and keep the market stable and healthy.