Author Wang Yanxing is a senior researcher at the Chongyang Institute of Finance, Renmin University of China. This article is reproduced from Fortune Chinese website on October 19.
chances are left to those who are prepared. Most of the real estate companies mentioned in the article have been dormant in the market for many years. They have not only reserved the industry's core capabilities, but also seen through the fluctuations and warmth of the real estate industry. They attacked against the trend to "acquire land", which is definitely not a momentary impulse like "crazy tying in the washbasin", but acted at the opportunity, accumulated strength, and took every step.
The demise of the crazy man is an opportunity. "If God wants it to perish, he must first make it crazy." It can be said that it is the crazy people who dig their own graves and have led to the sorrow of the real estate field. However, misfortune is the basis of good fortune. The biggest benefit of the major reshuffle of the real estate industry is that it makes the real estate value and price tend to be unified and rational. In other words, real estate eliminates the "copy" component and injects new elements of "living". This is definitely the best time for new investors to step in.
"I am greedy when others are afraid." The fear has not yet been eliminated, and the chain of debt crises such as Evergrande is long and triggers long-term shocks: losses, layoffs and more defaults. The government has prevented Evergrande and others from going bankrupt, but the company's dilemma has spread to the Chinese real estate market and many related industries. This situation has further worsened since the beginning of this year, and the real estate market has been sluggish across the board, becoming the main factor dragging down China's economy.
When Evergrande and other companies are unable to pay the bills, companies in construction services and building materials (including steel and coatings, etc.), financial institutions and other industries have absorbed a lot of losses. Some of these companies were forced to lay off employees and delay paying their bills to others, which were also affected. Many people who used their savings to buy Evergrande's pre-sale houses have been at a loss for more than a year, and they don't know when Evergrande will be able to deliver the house. Sales of new properties by Chinese developer giants have declined year-on-year for 15 consecutive months, and there is no sign of improvement.
Local governments must downgrade. "Thirty years, Hebei East and Thirty years, Hebei West", some original arrogant and even arrogant local governments rarely lowered their heads and gradually returned to rationality, fairness, and even humility. However, some local governments still have not found the right way.
Rational real estate purchases are still one of the few effective tools for some people to hedge against the downward trend of the world economy and high inflation. Especially for households without a house or households with difficulties in residence.
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