Industry news

Feng Jun: Consumers need to be rational about housing price fluctuations

On the afternoon of May 12th, Feng Jun, president of China Real Estate Association, visited Leju Finance's "President Face to Face" live broadcast, giving authoritative interpretation of the recent hot spots in the real estate market, and answering questions from consumers about house purchase and real estate practitioners.

There are three conditions to consider when buying a house rationally
Since the beginning of this year, many places have introduced policies to support the real estate market to meet the reasonable housing demand of home buyers. At the same time, some real estate companies due to financial pressure caused the occurrence of lightning problems, which also caused the doubts of home buyers. Faced with the question of whether it is a good time to buy a house, Feng jun said that as a rational consumer, there are three conditions to consider when buying a product. One is whether they need it; Second, whether it is within the scope of their ability to pay; Third, for short-term price fluctuations, can withstand psychological pressure.
Feng jun pointed out that the fluctuation of real estate prices is a normal phenomenon. From domestic and foreign experience, except for a few cities with relatively large net outflow of population, namely atrophic cities, the real estate price will rise in the long run. But long-term rise does not exclude short-term fluctuation, and consumer also pays close attention to short-term price fluctuation quite, nevertheless, short-term market fluctuation is very hard "trounce" on price nadir. If buying a house is to effectively solve the housing problem, then it is suggested to consider the above three points.
In Mr. Feng's view, the current average price of housing in various cities has fallen by nearly 20%, so there is not much room for further declines. On the one hand, the rigidity of cost makes it difficult for housing prices to fall again; On the other hand, the market as a whole has gradually emerged from the downturn, especially in the recent period of intensive policy, so that the liquidity risk of some housing enterprises has been greatly alleviated in a short period of time. These comprehensive effects will make the real estate market demand shortage, low demand and other conditions have a great improvement. On the basis of these two factors, it should be a good time to buy if you are self-employed.
Development business takes ground to want to combine oneself production and soil store a circumstance
Recently, most of the urban land auction market continues to low temperature situation, some developers in the live broadcast frankly, do not know the current should not take land.
In this regard, Feng Jun said that in recent months the market heat recovery is relatively fast, enterprises to take land, with their own production capacity, land reserves have a direct relationship. If the land bank is now almost gone, then the ability to sustain development is gone, and companies must take the land.
At the same time, Feng Jun pointed out that in recent months, the overall premium rate of land auction is gradually narrowing, and many plots are basically sold at the bottom price. Now, in terms of land value and price, it should be in a relatively stable situation.
Future practitioners should meet challenges with new knowledge and abilities
In recent years, the downward pressure of the real estate market has increased, and many enterprises are gradually reducing the scale of operation. Many employees in the real estate industry feel confused and do not know how the market will develop in the future.
In view of the current industry practitioners confusion, Feng Jun believes that in the future for a long time, people's demand for housing will be quite large. First, in the process of urbanization in the future, agricultural population will move to cities and population migration between cities will cause housing demand, which will continue for at least 20 or 30 years in the process of urbanization. Second, the central government has set a target of increasing disposable income by 6% per year for the second "centenary". It is believed that people's income will continue to increase in the future, and with the change of income and improvement of living standards, people's requirements for housing quality will also continue to increase.
At the same time, Feng also pointed out that the real estate industry has made the slowest technological progress in recent years. Therefore, practitioners in the real estate industry face a very important task, which is to constantly recharge their batteries, win the competition in the industry with quality and service, and meet new challenges with new knowledge and new ability in the new stage of development.
In addition, feng Jun also gave comprehensive and detailed answers on people's livelihood issues such as affordable housing application, housing design for aging, and matters needing attention in housing transactions.
Attached: President Feng Jun of China Real Estate Association answers hot real estate questions online

Q: This year, a number of Chinese cities have released restrictions on home purchases and loans. Do you think there will be more restrictions? For example, we are very concerned about Beijing, Shanghai, Guangzhou and Shenzhen. If policies are loosened, will housing prices rise again?
Chairman Feng: In fact, the macro policies in the real estate market can not be loosened, because in each stage of development, the main contradiction is different, the main aspects of the contradiction are different, so the policy measures adopted and the target of regulation are also different, which is quite normal. It didn't say it had to be tied up, and now it doesn't say it has to be loosened up. These are two different categories. The central government's approach to real estate regulation is based on the principle of "one city for each city" and "one policy for each city", supporting local governments to adjust their policies according to local conditions.
We need to consider the issues concerning Beijing, Shanghai, Guangzhou and Shenzhen in light of actual conditions. One of our priorities is to stimulate potential consumer demand for housing. At the same time, we need to prevent systemic risks, as the Politburo said at the meeting.
On the whole, housing prices in Beijing, Shanghai, Guangzhou and Shenzhen will continue to rebound under the condition of insufficient supply, of course, it may not immediately rebound. Under such pressure, the government's policy focus is to encourage legitimate housing consumption demand, or housing is for living, to meet diverse housing needs, rather than encouraging investment and speculation.
In fact, the sluggish real estate sales in Beijing, Shanghai, Guangzhou and Shenzhen in recent months are related to the downward pressure of the overall economy. Under the downward pressure of the economy, we all feel that income growth is not reliable. If the reliability of income growth is doubted, the desire to spend will weaken.
Of course, the China Real Estate Association has taken this into account when making suggestions to relevant government departments. If policy boosts investment demand too much, it is likely to push up house prices, especially if overall supply is insufficient. Prices are set by the rich, not by those who can cut prices to buy houses, so preventing prices from rebounding too quickly should also be an important part of policy considerations.
Judging from historical experience, in the 2008 global financial crisis, the real estate market was in a slump and housing prices were falling for only three to five months, which was not a long time. At present, prices are already in a relatively low situation, upward pressure will still exist. Two things should be done. One is that consumers need to treat market price fluctuations rationally, and the other is that developers should not take advantage of price fluctuations to make profits.

Q: At present, many of the communist housing, affordable housing and public rental houses advocated by the government cannot be bought or rented. Are there any strategies for grabbing houses with such properties?
Feng: There is no strategy to rob a house, because the government must be open and transparent in providing public resources for social security. If you meet the requirements, you can register and queue at the specified website or place. If you don't know where to register, you'll never be able to rent or buy. Want to master the public information of the government above all clear, go applying according to the regulation channel next, do not have what strategy, the thing of opportunism cannot be done inside this.

Q: Children are going to school, do you want to replace the school district house? Will the school district house be canceled?
Feng: Actually, the problem of housing in the school district is not the problem of housing, but the problem of the school district. It is the problem of unbalanced allocation of educational resources. Don't mention this problem to the problem of housing. All the local governments are solving the problem of unbalanced allocation of public educational resources, but it is difficult to realize the equal allocation of educational resources in the whole society in the short term. You've got all the schools up to the level of Beijing No. 4 Middle schools. How is that possible?
Of course, we want to provide a good educational environment for children as far as possible, but to let nature take its course, do not deliberately to listen to those who say that the school district housing, similar to the advertising of the heckling thing, not worth it.

Q: On the one hand, there is a loosening of regulation policies, on the other hand, real estate enterprises explosion of thunder information, for ordinary home buyers, in the face of the current macroeconomic environment, should they buy a house?
Chairman Feng: There is obviously a demand contraction in the real estate market. In fact, the demand contraction gradually showed signs from the second half of last year, and there was a certain improvement in March this year. However, due to the repeated epidemic, the real estate market continued to be in a depressed situation.
Netizens are very concerned about whether now is the right time to buy a house. As I understand it, as a rational consumer, there are three conditions to consider when buying a commodity: first, whether he needs it or not; Second, is it within the scope of their ability to pay; Third, for short-term price fluctuations, can bear psychological pressure.
Overall, housing prices in various cities have fallen by nearly 20% on average, so there is not much room for decline. First, cost rigidity makes it difficult to have a further fall space; Second, from the current situation, on the whole, it has gradually emerged from the market downturn.
I expect the market to return to normal in a few months. Especially in the recent period, policies in various aspects have been introduced intensively. This comprehensive effect will greatly improve the lack of demand and depressed demand in the real estate market. At the same time, various policies have been introduced, so that liquidity risks can be greatly alleviated in a short time.
On the basis of these two factors, it should be a good time to buy a house if you are going to live for yourself; But if you never sell because it might fall tomorrow, you'll never hit your consumption target.

Q: According to the ratio of housing rents to sales, as well as the ratio of income to housing prices, is the housing price still high?
Chairman Feng: In fact, the housing price is relative to income. China's "housing price to income ratio" is relatively high compared to the current stage of economic development. When we solve this problem, we can improve the "housing price to income ratio" by increasing income rather than simply trying to bring down the housing price. Assuming that incomes double without rising house prices, the price-to-income ratio falls by half. As long as house prices grow more slowly than incomes in the long run, society's well-being improves.
Ask: when buying a house to bridal chamber, period room, secondhand room how to choose?
Feng: It is better to buy an existing house now. Seeing is believing, including the quality of the house and the surrounding facilities. But overall, pre-sales now account for more than 80% of the total sales, so there are very few houses for sale, it is hard to see. Experts are also calling for the cancellation of pre-sale and direct sales.
Of course, the most important thing for home buyers is location. In fact, it is not bad for second-hand room, it is not bad for first-hand room, the appropriate location is more important than what. For example, if you are in Pinggu, Beijing, your house is well built, but it takes you two hours to get to work. You can't afford the transportation costs. So on the choice of primary house and second-hand house, or to choose a lot. The General Secretary said that "work-life balance" is a key factor in ordinary people's lives. Arriving at work in ten or twenty minutes is a completely different sense of happiness than arriving in two hours.

Q: This netizen's hometown is in a third-tier city in Henan province, his ability to buy a house in Zhengzhou is under great pressure, it is no problem to go back home to buy, but the current market makes him afraid to sell in a small city. Can you buy a house in a small city? What are the prospects for future development?
Chairman Feng: Buying a house itself is an issue related to employment. Buying a house is for living, and living must be related to employment. Although it is cheaper to buy a house in third - and fourth-tier cities, the first thing to consider is whether there are job opportunities there. And when I say employment opportunity, I mean the opportunity for full employment, not just being able to find a job, but being able to find a job that matches your expected income. You can't just live there because it's cheap, you lose your job, you lose your income. So you have to think about it that way.
But this is a paradox. Normally, there are more job opportunities in big cities, and incomes in big cities are higher than in small cities. So cannot say simply go small city, small county buys a house cheap, but did not have obtain employment, stay there stem.

Q: This netizen from Hubei province asked, he is working in Wuhan and wants to buy a house for his parents. Should he buy a new house or a second-hand one? Should I buy a bigger house far away or a smaller one in the city centre?
Feng: When buying a house for the elderly, we should first consider two factors besides money. One is the convenience of life and the other is the convenience of medical services. These are the most important factors.

Q: I want to buy real estate for my father-in-law in Hainan or Yunnan, but I don't know whether I should buy it now because of the fluctuating epidemic.
Chairman Feng: Any investment behavior to buy a house must be bought at the lowest point, but the lowest point is not his rational analysis, it is completely accidental, good luck. But you can't always rely on luck as your rule of thumb. So in fact, the decision to buy a house should be treated very rationally.

Q: for developers, the soil is a little cold now, do you want to take the land?
President Feng: Judging from the recent situation, the local auction is not cold. In general, it was cold in the past few years, but the local auction market has recovered quickly in recent months.
The question of whether to take land or not is too specific. It has something to do with the production capacity of enterprises and the land reserve. If the land reserve is almost gone and the sustainable development capacity is gone, we must take land.
Over the past few months, the premium rate of land auction is gradually shrinking, and many of the basic prices are out of the bottom price. At present from the value of land price, should be in a relatively stable situation. In the whole development process, the constant growth of factor price is an important factor leading to the increase of real estate price. How to see the influence of factor price to social economy operation calmly, this needs to have certain wisdom.

Q: I heard that Evergrande has resumed work and sales. Can they still buy their house?
Chairman Feng: It is too difficult to answer this question, because evergrande's projects are all over the country after the emergence of liquidity risk, and the resumption and progress of each project are not completely consistent.
The house will have to see the real estate site. The first is to see whether the resumption of work is real; Second, when dealing with evergrande's assets, the government has taken certain locking measures, which depends on whether the credit and debt of the project itself can be balanced. If the project itself is insolvent, it will be at risk. Third, to see the ability to deliver this building follow-up conditions do not have. We should take a look at all these elements. Can not say that should buy should not buy, according to the situation of real estate is different, or to see its follow-up progress and ability.