On the last day of 2021, “Ding Zuyu’s annual conference on evaluating the real estate market” was held online.
“The past five years have been a five-year period of high growth and rapid development for the real estate industry, which can be called the platinum era. Now, real estate enterprises are facing a huge crisis, enterprises are facing the risk of default, projects are facing the risk of delivery, and suppliers are facing the risk of payment, because the number of projects with shutdown and delayed delivery has increased sharply.” Ding Zuyu, CEO of E-House enterprise group, said in his speech.
According to the data, since 2021, many real estate enterprises such as China Evergrande, China Fortune Land Development Co.Ltd(600340) , Xiexin Yuanchuang, Sichuan Languang Development Co.Ltd(600466) , sunshine 100, flower year, Xinli holdings, contemporary real estate, jiazhaoye and China Olympic Park have defaulted on their debts. At the same time, 34 cities have sold and undelivered 831 million square meters, and the top 100 real estate enterprises have sold and undelivered nearly 1.3 billion square meters. Among them, there are many suspension and delayed delivery projects in Changsha, Chongqing, Wuhan and Zhengzhou, all of which exceed 2 million square meters; Suppliers also face delivery risks: Skshu Paint Co.Ltd(603737) , Suzhou Gold Mantis Construction Decoration Co.Ltd(002081) , Monalisa Group Co.Ltd(002918) , Suofeiya Home Collection Co.Ltd(002572) , Jiangshan Oupai Door Industry Co.Ltd(603208) , Hitachi Elevator and other upstream and downstream real estate suppliers withdraw bad debt reserves.
He believes that the reasons for this situation include external and internal factors, including demand overdraft (7.4 billion square meters and 63 trillion yuan have been sold in recent five years, accounting for 41% and 56% of the past 20 years), house price overdraft (house price has only risen but not fallen in the past 20 years, the ratio of house price to income has climbed to 8.9 years, and the five-year compound growth rate of house price is 7%) Overdraft of payment capacity (the balance of mortgage exceeds 38 trillion, and the leverage ratio of residents soars), overdraft of supply (the broad inventory of 70 cities reaches 1 billion square meters, and the occupancy rate of new houses is low), deleveraging implementation layer by layer, policy superposition, changing market expectations, etc; Internal causes include excessive pursuit of rapid expansion of scale, excessive pursuit of rapid increase of sales, financing and investment, on balance sheet and off balance sheet of real estate enterprises in the past five years.
“In a word, that is, ‘the excessive financialization of real estate has led to today’s crisis’.” Ding Zuyu said.
Looking forward to the future of the real estate industry, Ding Zuyu believes that real estate enterprises must change their path dependence. The operation mode of high debt and high turnover in the bronze age can not be sustainable, and should adhere to long-term ism and honest management; At the same time, he gave several long-term forecasts:
1. The industry has made great strides from the “platinum age” to the “Bronze Age”. Real estate will still be the ballast and pillar industry, but the scale returns to five years ago. It is expected that the industry scale will average 1.06-1.27 billion square meters in the next five years, an increase of 0.6% – 20.3% over 2011-2015 and a decrease of 16% – 29% over 2016-2020.
2. Real estate enterprises will focus on 25 cities for a long time; The 25 cities are mainly distributed in the Yangtze River Delta, the Great Bay area of Guangdong, Hong Kong and Macao, Beijing Tianjin Hebei, Chengdu Chongqing urban agglomeration, the urban agglomeration in the middle reaches of the Yangtze River, Guanzhong Urban Agglomeration, Zhongyuan urban agglomeration, Shandong Peninsula and Haixi urban agglomeration.
3. Focus on the second curve track. Among them, the total scale of property management will reach 1.6 trillion in 2025, with an average annual growth of about 5%; According to the annual increase of 10% of the total rental population and 5% of the rent increase, the scale of China’s rental housing market will reach 4 trillion in 2025; By 2025, the scale of the pension industry will exceed 12 trillion yuan, involving more than 3 trillion yuan related to real estate; The scale of second-hand housing will be maintained, and new intermediary models such as unilateral agency are ready to emerge; However, the commercial pressure will further appear in the next five years. The average vacancy rate in key cities across the country will still rise to 10%, and the office rent, rental rate and asset value will further decline.
(Securities Times · e company)
