Translate to English: Every year, 2 trillion will be collected! Is the property

Frankly speaking, the real estate market in August was quite grim, and if no major moves are made in September, it will undoubtedly continue the trend of August. However, if the United States really starts to lower interest rates, the policy space we can play with in September will be quite large. Once the policies are significantly relaxed, it will lay a solid foundation for the recovery of the real estate market next year. But what if the United States is adamant and refuses to lower interest rates? Our real estate market will be quite passive.

In response to this situation, many economists and real estate experts have recently been offering advice and sharing their opinions. Teacher Jiang will interpret them one by one for everyone:

01, Meng Xiaosu

Taxing small property rights, can we collect 2 trillion per year?

Recently, Meng Xiaosu proposed a viewpoint:

Taxing small property rights on housing could yield 2 trillion per year!

Meng Xiaosu believes that the number of small property rights houses is huge, with a total area of about 8 billion square meters. It is possible to tax small property rights houses by making up for the land transfer fee, and the tax rate can be set higher than that of future large property rights houses.

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If taxed at 2.5%, a preliminary estimate shows that with 8 billion square meters, the annual tax revenue would be 2 trillion!In fact, the owners of these small property rights houses are also willing to pay, why is that? Once you impose a tax, it indicates that the legalization of small property rights is confirmed. Although they have to pay a 2.5% tax annually, the value of their houses has also increased, so this deal is not a loss!

Actually, from a fairness perspective, it is necessary to tax small property rights houses because it is also unfair to those who have bought commercial housing normally and paid various taxes.

Furthermore, small property rights houses do not have a clear house usage period, and to some extent, they are almost perpetual usage rights, which further intensifies the sense of social unfairness.

However, according to Meng Xiaosu's statement, levying a 2.5% annual tax is actually not realistic, as it would impose a heavy tax burden on this group of people.

This money will eventually be added to the tenants by the landlords. With 80 billion square meters of small property rights houses, calculated at an area of 100 square meters per set, it amounts to 80 million sets. This means each household has to pay a tax of 25,000 per year, which is 2,000 per month!

This is not a small amount, and for those working outside, this money is too stressful.

So, is there a good solution?

Actually, we can refer to the rental assessment method for taxation. Taxing at 12% of the annual rent is quite reasonable. For example, if the monthly rent is 2,000 yuan, the annual rent is 24,000 yuan, then the annual tax for this small property rights house would be 2,880 yuan.

This can greatly reduce the burden on residents. So, how much revenue can this valuation tax method create for local governments?

Let's take Shenzhen as an example:The current total construction area of small property rights housing in Shenzhen is 4.28 billion square meters;

Among them, according to the rent level that can be queried at present, on average, the rent per square meter is about 44.3 yuan;

Assuming a tax is levied at 12% of the annual rent, it could bring more than 20 billion in tax revenue to Shenzhen every year.

But don't forget, Shenzhen's small property rights housing is very abundant nationwide, and many small and medium-sized cities may not even collect 200 million in a year;

Moreover, it may also far exceed the affordability of ordinary families, and it might even trigger more serious social issues at that time.

Therefore, regarding the taxation of small property rights housing, we still need to continue researching and considering, and must not act rashly!

02, Ma Guangyuan

Is it feasible to reduce the interest rates on existing mortgages?

Recently, Mr. Ma Guangyuan made a speech, in which he called for a reduction in the interest rates on existing mortgages and suggested the establishment of a normalized linkage mechanism for adjusting the interest rates on existing loans;

What is a linkage mechanism?In simple terms, the idea is that as long as the interest rates for new housing loans are reduced, the interest rates for existing mortgages should be automatically adjusted as well. This way, there's no need to make appeals every time, ensuring that homeowners with existing mortgages are treated the same as those with new mortgages, preventing social conflicts and avoiding the rush to prepay mortgages.

On the surface, this suggestion seems quite good, as it aligns with everyone's interests. However, there's a nagging feeling that there might be some issues with this proposal, yet it's hard to put a finger on them. Do you feel the same way?

Firstly, let me state my position: I wholeheartedly support reducing the interest rates for existing mortgages, as I myself bought a house at a high price point. Reducing these rates would mean I could pay less each month, and who wouldn't want to use that money to improve their life?

But we need to analyze the specifics:

According to experts, the current amount of existing mortgage interest is as high as 38 trillion. These rates were adjusted down last August. However, since the beginning of this year, there have been several interest rate cuts, leading to a one percentage point difference between the rates for existing mortgages and new housing loans. This gap is significant, essentially meaning that existing homeowners have to pay one-third more each month compared to new homeowners.

If reducing the interest rates for existing mortgages can alleviate pressure for many people, why hasn't it been implemented yet?

It indicates that there must be some "fine print" involved. What exactly is this fine print? Let me reveal the answer today:

Imagine, if you pay less in loan interest, who suffers? Isn't it the bank?

How tough have the banks been this year? If you have friends working in the banking sector, you would know. But after all, banks are part of the financial system, and no matter how difficult their situation, they are better off than private enterprises. No matter how short of funds banks are, they always have an inexhaustible supply of money.But if the interest rate on existing mortgages is reduced, the net interest margin of banks will decline, and bank stocks will fall. When bank stocks fall, it actually affects the interests of financial consumers. Do you all understand this?

Banks are just intermediaries; the real losers are the shareholders.

The major shareholders are the state, and the minor shareholders are thousands of families.

So, reducing the interest rate on existing mortgages does indeed alleviate the monthly mortgage pressure for many families, but behind this, it is another thousands of families who are paying the bill. How can the sugarcane be sweet on both ends?

In fact, the so-called linkage mechanism, I believe, is unreliable!

Today, it is because the interest rate on new houses is reduced that there is a call to reduce the interest rate on existing mortgages. What if the interest rate on new houses is increased tomorrow? Should the interest rate on existing mortgages also be increased?

You want to benefit from all the good things and not want any of the bad ones. Isn't this the selfish side of human nature?

Finally, I tell everyone that reducing the interest rate on existing mortgages is really not very meaningful. You were supposed to repay 10,000 yuan per month, and now you are allowed to repay 9,500 yuan, saving 500 yuan per month. How significant can this be for your life? This, in turn, allows old problems to remain unresolved while new problems emerge.

Instead of reducing the interest rate on existing mortgages, it would be better to issue large consumer vouchers to directly stimulate consumption and the economy. Wouldn't that be much better?

03, Gao ShanwenThe central bank does not expand its balance sheet, the real estate industry will be wiped out.

Gao Shanwen recently expressed a view: "If the central bank does not expand its balance sheet, the real estate industry will be wiped out!"

Is this statement correct?

From the perspective of macroeconomic regulation, this view is correct because expanding the balance sheet is equivalent to easing monetary policy, but this easing does not mean direct money printing. Instead, it is achieved by purchasing government bonds, thereby expanding the overall money supply.

Didn't the central bank issue 10-year and 50-year government bonds some time ago? People bought these bonds, so where did the money go? Didn't it end up in large infrastructure projects and in the hands of real estate companies?

Once you understand this principle, let's continue the discussion:

The monetization of shantytown renovation in 2015 can be considered, to some extent, an act of expanding the balance sheet. It can bypass intermediate links and allow the government to directly inject funds into the market, distributing money to individuals and businesses;

Why is it now said that if the central bank does not expand its balance sheet, the real estate industry will be wiped out?

Because real estate companies cannot obtain financing. Even if the state orders banks to lend to real estate companies, banks are reluctant to do so. Why? What is the current situation in the housing market? Can the money lent out be recovered?

Banks are profit-oriented institutions that need to support so many employees. They don't care about the big picture; they only care about profitability. If there's no money to be made, no matter how persuasively you argue, they won't lend you money.So, it becomes necessary to resort to the ultimate move, which is expanding the balance sheet. What is meant by expanding the balance sheet? It is the direct allocation of fiscal funds to enterprises, which is the most direct and effective method.

In my opinion, it's not just real estate companies that need to expand their balance sheets, but all industries should do so. There is a significant advantage to expanding the balance sheet, and that is the forced creation of inflation. Why do I say that forcing inflation is a good thing?

Consider this: how many families and businesses are in debt now? When high inflation arrives, it essentially dilutes the debt, alleviating pressure on everyone. If you are paying a monthly mortgage of 10,000 now, what about in 10 years? Won't that 10,000 have the same purchasing power as 2,000 does now?

Do not assume that artificially raising inflation will necessarily lead to an increase in wealth disparity. While this is a fact, the living standards of the common people will also improve due to inflation because the baseline is raised!

Looking back 40 years ago, at that time, an average rural family could not afford to eat meat every day; it was already a treat to have meat during festivals. Now, rural families can enjoy fish and meat every day, indicating an improvement in living standards.

The future will be the same; not only will we have fish and meat every day, but we are also working on creating beautiful rural areas, making the countryside more attractive than cities, and enhancing everyone's happiness index, which is essentially raising the standard of living for everyone.

On the other hand, if our future is a society with long-term deflation, the lives of the common people will actually get worse because if everyone stops consuming, with no transactions, where is the economy?

After saying all this, I want everyone to understand a simple truth: it is the housing prices that are the foundation of the economy!Only when the economy is doing well can there be expectations and purchasing power, which can drive the real estate market to function!

The top priority of the current economy is to stimulate inflation. Once the United States cuts interest rates in September, the world will enter an era of high inflation in the fourth quarter, which is an opportunity for foreign countries.

The opportunity domestically also lies in the fourth quarter of this year, because we need to achieve our annual growth target of 5%. In order to reach this goal, policies with more than three times the usual benefits will be introduced in the fourth quarter!

04, Yu Liang

House prices have fallen to a reasonable level

Vanke held its mid-year performance meeting a few days ago, and Yu Liang made a point at the meeting that has caused quite a stir in the industry:

"After three years of adjustment, house prices have now returned to a relatively reasonable level. The cost-effectiveness of new products has also been greatly improved. The policy support for diversified housing needs has also made buying a house easier.

In addition, looking at the supply side, the current level of industry supply is relatively low. In the future, as the supply and demand relationship improves, it also creates conditions for the market to emerge from the trough and regain upward momentum."

Teacher Jiang actually has reservations about this statement, and my views are as follows:

1. Vanke Chairman Yu Liang's speech this time is indeed of high quality. He did not say that the prices have bottomed out, but rather that they have fallen to a "reasonable level," creating favorable conditions for emerging from the trough in the future.Take a look at this speech; it's as correct as the phrase "to survive" that was said back then.

Yu Liang said that in three years, housing prices have fallen back to a relatively reasonable level. Implicitly, he's telling everyone that now is a good time to bottom-fish. As for this statement, I think we can only take it with a grain of salt, at most 50%.

Indeed, I acknowledge that housing prices in many cities have dropped by more than 40%, and it's possible that in some local areas of certain cities, the prices have plummeted by 70%. However, the perception of housing price fluctuations varies greatly from person to person.

For instance, in a small city, where housing prices are inherently low, originally selling for four to five thousand per square meter, it's unlikely for them to drop to two thousand per square meter, right? Developers wouldn't sell at a loss, would they? If the price really drops to 2000 yuan per square meter, would you dare to buy such a house? Aren't you concerned about the quality issues?

In smaller places, the volume of housing transactions is already low, and the prices are low, so many people don't have a clear concept and think that the housing prices in their city haven't dropped much.

But in big cities, such as Shenzhen, it's true that many properties have seen prices drop from a peak of 150,000 to 39,000, a more than 70% decrease. However, these are special types of school district houses that lack living functionality, and with the reform of school district housing policies, isn't it normal for the prices to have dropped by 70%?

The most realistic decline in housing prices in Shenzhen, which best represents the market perspective, is actually no more than 25%.

Take the Nanshan district where I live as an example; the price for basic necessity housing has only dropped from the original 80,000-100,000 per square meter to 60,000-80,000 per square meter.

The price per square meter for improved housing is still over 100,000, and for luxury homes, such as the second phase of HengYu Bincheng, the housing prices have hardly dropped. At their peak, they were still 300,000-350,000 per square meter, and now the price per square meter is basically still around 300,000.

Despite all this, I believe that China's current housing prices have achieved a "hard landing" because many developers have defaulted, stopped supplying, and the number of foreclosed houses has reached an all-time high. A large number of real estate companies and homebuyers have collapsed. What else could this situation be called if not a hard landing? Tell me?4. Therefore, can you say that the current housing prices are not at the bottom range?

I think no normal person would argue against this. Only those who still cannot afford a house when it has dropped to the bottom range might want to argue, but isn't that ridiculous?

In the core areas of the first-tier cities Beijing, Shanghai, Guangzhou, and Shenzhen, there are plenty of houses with a unit price of 30,000 to 50,000 yuan. Please note that these are core areas; it's just that the product quality and building age may not be as good, but living there is definitely not a problem.

In the suburban areas of the first-tier cities, there are plenty of products with a unit price of around 20,000 yuan. By sacrificing a little commuting time, you can live in a larger, newer house; in the suburbs of Guangzhou, there are even cheaper houses, with prices as low as 7,000 to 8,000 yuan, and they are also connected by the subway.

What about the strong second-tier cities? In the core areas, the unit price for essential housing is around 10,000 to 20,000 yuan, and for improved housing, it's 20,000 to 30,000 yuan. If it's in the suburbs, a housing price of around 10,000 yuan can get you a decent improved house.

At this time, during the low point in the real estate market, if you still cannot afford it, you should actually consider whether there is a problem with your way of making money, and whether applying for a subsidized housing unit is more suitable for your current needs.

5. The above are objective facts, but I cannot agree with a statement made by Yu Liang, who said that there is a shortage of supply in the current new housing market, especially in the improved housing market. This statement is incorrect!

Although the number of new starts has indeed decreased, to say that there is an overall shortage of supply is to speak without a clear conscience!

This year's inventory of new houses is actually at a historical high. In July, the area of commercial housing for sale reached 739.26 million square meters, with the area of residential housing for sale increasing by 22.5%. At this rate of sales, optimistically estimating, it would take 5 years to sell out, which is already an ideal situation. Pessimistically estimating, it would take 8-10 years to digest.

Yu Liang is sending out smoke signals, which is understandable, after all, Vanke is a real estate company and still needs to rely on selling houses to survive. How much money can you make just by operating rental apartments and renting out properties?6. In recent years, Vanke's strategy has changed time and again. As early as 2014, Vanke began to explore the path of transformation. At that time, the real estate industry was at its peak, yet Vanke had already started to think ahead and prepare for potential challenges. However, when we assess a person, it's not just about their words but more importantly, their actions.

In 2019, Vanke publicly declared the need to "survive," but behind the scenes, it was aggressively incurring debt, acquiring, buying land, and expanding nationwide. The result? In recent years, it has been burdened with heavy debt. Without the support of a "big player" in the background, Vanke would have faced numerous crises.

7. In fact, Vanke has been riddled with problems for a long time. Although it still ranks among the top in terms of real estate scale in China, when it comes to operational quality and product strength, it has long fallen out of the top ten nationwide.

Over the years, Teacher Jiang has been persistent in researching cities and real estate projects. Vanke's improvement projects in core cities have been increasingly lagging behind those of Longfor and Greentown.

Product strength is not something that can be created just by having a lot of money. It's not solely about accumulating wealth; it's a reflection of attention to detail and patience. It's like a person who is wealthy and can buy many luxury goods to adorn themselves, but this does not necessarily reveal their refined and cultured side.

Elegance and temperament require time, culture, patience, and the gradual accumulation of artistic taste. From this perspective, Vanke, China Resources, China Merchants, and Poly have already fallen out of the first-tier real estate brands. They have been replaced by real estate companies like Greentown, Longfor, and Binjiang that are dedicated to refining their products.

8. I can only say that the prosperity of Vanke is already a matter of the past era. The era of large-scale infrastructure in real estate has come to an end, replaced by a focus on refinement, deep cultivation, and an artistic and cultural atmosphere that improves the lifestyle.

The real estate industry no longer needs the uniform model of city-building; this model can be left to state-owned enterprises. Private real estate companies still have a narrow space for survival, and that is in high-end improvement and differentiated improvement.

Because private enterprises are closer to consumers, they can perceive consumer needs at the earliest opportunity and create products that meet the trends and demands of the times.