Removing administrative intervention in real estat

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Behind the disintegration of the purchase restriction territory of the real estate market: the removal of administrative intervention in real estate

behind the disintegration of the purchase restriction territory of the real estate market: the removal of administrative intervention in real estate

August 15, 2014

[China paint information] at present, although the long-term mechanism of the real estate market has not been established, the living environment of the purchase restriction has been completely changed. If we continue to restrict the purchase on a large scale, it will not only not help to cure the root cause, but also tend to weaken the effectiveness of the palliative effect. The limited relaxation of the demand released by the personal housing loan policy is not only conducive to the destocking, but also relieves the tension in the capital chain of real estate enterprises, opening up space for the implementation of the shanty town reconstruction strategy

the housing purchase restriction policy, which is regarded as a sharp tool for property market regulation, has withdrawn faster than expected. Because even if the management set the policy tone of "classified regulation" at the beginning of the year, allowing some cities with excessive inventory to appropriately adjust their property market policies to digest excess supply and prevent local door breaking risks, the red line of purchase restriction is regarded as the red line that can not be touched by "classified regulation". Therefore, whenever a city tries to use "destocking" as an indirect way to loosen the purchase restriction policy, the management will always stop it in time, and finally it has to be dismissed by the local government or transferred underground

unexpectedly, just entering the second half of the year, the management's attitude towards the local government's deregulation of purchase restrictions changed or even reversed. This obvious change began at the end of June when Hohhot issued a public document to loosen the purchase restrictions but was not "stopped". Taking into account the fact that Foshan, Shenyang, Changsha and other places have all been halted recently to loosen the purchase restrictions, Hohhot has successfully broken through, which has obviously been tacitly approved or even recognized by the management. After a short period of one and a half months, the purchase restriction territory collapsed rapidly, and more than 30 of the 46 cities that implemented the purchase restriction policy withdrew from the purchase restriction, and the action of breaking through the purchase restriction is also getting bigger and bigger. Fujian has introduced an incentive policy with the main content of comprehensively relaxing the purchase of houses by outsiders, and the first tier cities that have always adhered to the purchase restriction have also shown signs of withdrawal

then, what is the logic of the withdrawal of the purchase restriction policy? What are the reasons for the management's default

the author believes that we should look at the withdrawal of purchase restrictions in recent years from the perspective of overcoming difficulties in the reform of real estate marketization. The brand of purchase restriction administrative intervention is too deep, which is not in line with the general direction of deepening the reform of the administrative examination and approval system at the Third Plenary Session of the 18th CPC Central Committee and promoting the transformation of government functions to create a good development environment and provide high-quality public services. This was made clear at the first special meeting of the Political Bureau of the CPC Central Committee on the eve of the Third Plenary Session of the CPC Central Committee. p>

in fact, since the market-oriented reform in 1998, the reason why the real estate market is full of ills and problems is that there is too much government administrative intervention. According to the feedback of the central inspection team, corruption in the real estate industry was found in 20 of the 21 provinces inspected in the first three rounds of this year. From the land transfer and project bidding in the upstream, to the project development and planning control in the midstream, to the sales and distribution links in the downstream, government intervention and administrative approval run through the whole process of real estate, which is the source of high incidence of corruption

it has been 15 years since the market-oriented reform of the real estate market. Although it has made remarkable achievements in stimulating the economy, improving the appearance of the city and the quality of housing, there are signs of retrogression on the road of marketization. A careful review shows that the various obstacles encountered in the reform of key areas are basically related to the administrative intervention and administrative approval of real estate. For the whole market-oriented reform and the future economic and political system reform, it has reached the point where everything will fall short if we do not promote the complete marketization of real estate. Therefore, the cancellation of purchase restrictions and the removal of administrative intervention in real estate sales are only one part of the whole market-oriented reform

from the perspective of policy makers, the implementation of purchase restrictions nationwide in 2011 was originally a last resort. When the long-term mechanism of real estate market regulation is not in place, such as the reform of real estate tax system, the reform of fiscal and tax system, the adjustment of central local relations, the transformation of economic growth mode and housing security, in order to adjust the relationship between supply and demand in the real estate market and control the rise of house prices, it is necessary to take such a palliative policy as limited purchase to win time and space for the reform of system and mechanism. At present, although the long-term mechanism is still on the way to establish, the environment for the survival of purchase restrictions has completely changed. At this time, continuing to adhere to purchase restrictions on a large scale is not only not conducive to the root cause of the property market, but also tends to decline in the effectiveness of the symptoms

at present, except for the first tier and key second tier cities with long-term net population inflow, strong housing demand and prominent housing problems of migrant population, the supply-demand relationship of the national real estate market has been reversed. According to the monitoring of E-House Real Estate Research Institute, as of the end of June, the total inventory of new commercial housing in 35 cities across the country was 262.18 million square meters, an increase of 22.9% year-on-year, and the inventory hit a new record high; The average inventory digestion cycle of 35 cities is 18 months, and that of some core cities is more than 20 months, while the subsequent supply is endless. As of the first half of the year, the area of urban housing under construction in China was nearly 6billion square meters, and the area for sale was nearly 560million square meters, while the new construction in the first half of the year exceeded 600million square meters, but the sales of commercial housing was less than 500million square meters. Therefore, the overall oversupply of commercial housing across the country has led to a decline in housing prices, and the cancellation of purchase restrictions is the general trend

the downward trend of the real estate cycle has become the biggest thrust that the economic growth rate may slide out of the lower limit in the second half of the year, and all circles have reached a consensus on this. In the first half of the year, the "micro stimulus" characterized by the central bank and the government adding leverage barely kept the economy at the lower limit of 7.5%, but from the central bank's "monetary policy implementation report for the second quarter of 2014", it can be seen that the negative impact of the upper level on the "micro stimulus", such as deteriorating government debt, possible inflation, low efficiency and soft constraints of government investment, difficult to reduce the financing cost of the whole society, overcapacity Concerns about delaying structural reform and so on began to rise

institutions generally predict that the export situation in the second half of the year cannot be as good as that in the second quarter, and it is impossible to continue to increase the intensity of stabilizing investment by "micro stimulation". The focus should be tilted, and the transformation of shanty towns that can take into account "stable growth", "structural adjustment", "promoting development" and "benefiting people's livelihood" will become the focus. Although the government implements targeted loose loan investment in the reconstruction of shanty towns, and the samples should be placed close to the support, and the back of the sample gap should face the pendulum blade, it still has to play the role of "four or two pulling a thousand pounds" nationwide, and the bulk of the project investment still depends on the developers. However, due to the long cycle of shed reform, high uncertainty, high input costs (including demolition compensation, public facilities and social undertakings), and deteriorating inventory pressure, the enthusiasm of developers to participate is not high. In addition, the year-on-year growth rate of real estate funds in place fell from 26.5% last year to 3% in the first half of the year, and the negative growth of sales receipts accounting for 40% of the funds in place for consecutive months is the culprit of the decline in the growth rate of funds in place. Therefore, if the transformation of shanty towns is to be carried out according to the plan, we must solve the problem of the source of funds for developers. Deregulation, such as the administrative intervention of purchase restriction, and the release of suppressed demand in the property market are undoubtedly the shortcut to solve the problem. Moreover, it is impossible to increase money supply based on "micro stimulus" as in the first half of the year, while banks are still cautious about housing loans, and the housing loan situation should be tense in the future

therefore, in the case of high inventory pressure, coupled with the limited space to relax the personal housing loan policy, even if the purchase restrictions are relaxed (except for the first tier cities), the housing prices in major cities will not appear flat push type. There is indeed a theoretical support for the obvious anti general torsion tester. What principle does it work through? And the suppressed demand released by deregulation is not only conducive to the destocking of inventory, but also can alleviate the tension in the financial chain of real estate enterprises, It has opened up space for the implementation of the shanty town transformation strategy

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