"The road of real estate in 2021 is hard to walk. There are waves sighing, music whirling, mud and smooth roads. These good or bad days will become the past, and it is difficult for us to go back to the past, but we have the right to choose to rebuild the future." On the last day of 2021, the 2022 "leap forward - Ding Zuyu's annual conference on evaluating the real estate market" was held online. Ding Zuyu, CEO of E-House enterprise group, said that the real estate industry has unlimited possibilities in the future.
According to the practice in recent years, Ding Zuyu will resume the real estate market for one year at the end of the year and predict the coming year. He pointed out that the real estate industry has officially bid farewell to the "platinum era" and stepped into the bronze age. Due to serious overdraft, the scale of the industry will return to the level of five years ago. However, he also said that although the industry is facing a short-term crisis, real estate will still be the ballast and pillar industry, and there is still huge market space in the second curve.
Record property sales in 2021
"In 2021, the scale of the whole real estate industry and the transaction scale of new houses and second-hand houses across the country reached a record high." At the press conference, Ding Zuyu released a set of latest data - in 2021, the sales area of commercial housing in China reached 1.83 billion square meters, and the sales reached 18.7 trillion yuan, both setting new records.
Ding Zuyu pointed out that in the first half of 2021, the real estate market was once very good, but in the second half of 2021, sales and financing fell sharply, and the cumulative trading amount from July to November 2021 fell by 27.8% year-on-year. This has never happened in the past five years. In the past, it was basically the second half of the year. The market was not only better than the first half of the year, but also better than the same period of the previous year.
There was an obvious turning point in the real estate market in 2021. In the first half of the year, the cumulative trading amount increased by 37% year-on-year. In the second half of the year, the sales and financing of real estate enterprises fell sharply, the transaction amount halved, the trading amount decreased by nearly 30% year-on-year, and the total financing decreased by nearly 40%. In the first half of the year, real estate enterprises actively scrambled for land and swarmed into high-energy cities. The top 30 real estate enterprises took 54% of the plots of land in China; In the second half of the year, the land market was depressed, and the "national team" and local state-owned enterprises had no choice.
In Ding Zuyu's view, the inflection point of the industry has something to do with the industry's own development stage. The high growth for several consecutive years has overdrawn the consumption power. In the past five years, the financing, sales and investment scale of developers have expanded rapidly, which has brought a series of serious problems.
Ding Zuyu believes that 2016 is the turning point of the industry. At that time, the residential scale jumped from 1.1 billion square meters to about 1.4 billion square meters, and directly crossed from the "Silver Age" to the "platinum age". It is the "market overdraft" and excessive financialization of the industry in the past five years that have led to the current crisis. However, real estate is still the "ballast stone" of China's economy, and the real estate industry will continue to be a pillar industry.
"Farewell to the platinum era" in the property market in 2022?
Ding Zuyu's attributive for the next year is "farewell to the platinum era". Because most real estate enterprises made wrong judgments on real estate regulation in the past. While the sales scale expanded greatly, they borrowed heavily, which brought about the current liquidity crisis. In the future, it is bound to correct the past high leverage expansion model.
The real estate market of "farewell to the platinum era" is facing crises, including: first, enterprises are facing the risk of default. Since 2021, many real estate enterprises such as China Fortune Land Development Co.Ltd(600340) , Xiexin Yuanchuang, Sichuan Languang Development Co.Ltd(600466) , sunshine 100, China Evergrande, flower year, Xinli holding, contemporary real estate, jiazhaoye and China Olympic Park have defaulted on their debts, of which China Fortune Land Development Co.Ltd(600340) announced that they have failed to repay the principal and interest of their debts on schedule, up to 103.072 billion yuan, Tahoe Group Co.Ltd(000732) 61.758 billion yuan and Sichuan Languang Development Co.Ltd(600466) 25.881 billion yuan. Second, the project faces delivery risk. The data show that the sold and undelivered projects in 34 cities have reached 831 million square meters, and the top 100 real estate enterprises have sold and undelivered nearly 1.3 billion square meters. Among them, Changsha, Chongqing, Wuhan and Zhengzhou have many suspension and delayed delivery projects, with the above four cities exceeding 2 million square meters. Third, suppliers face delivery risks. In Ding Zuyu's view, suppliers may face greater risks and repayment pressure than real estate enterprises.
"The annual turnover of commercial housing in the real estate industry is about 15 trillion yuan. Compared with other industries, real estate is still the 'ballast stone' of China's economy, and the real estate industry will continue to be a pillar industry." Ding Zuyu said that the industry scale is expected to average 1.06 billion to 1.27 billion square meters in the next five years, a decrease of 16% - 29% over the past five years (2016-2020) and an increase of 0.6% - 20.3% over 2011-2015.
Ding Zuyu said that the space for the second curve is huge. It is expected that by 2025, the total scale of the property industry will be nearly 1.6 trillion yuan and the total scale of the leasing market will reach 4 trillion yuan. In the era of the king of the enterprise, the real estate enterprises must change the path dependence. The operation mode of high debt and high turnover in the bronze age can not be sustained, and must adhere to the long-term principle.
(China Economic News Network)
