Annual Report on Development of Housing Market in China (2009-2010) Release Conference
Annual Report on Development of Housing Market in China (2009-2010) Release Conference
Publish Date: 2014-02-26 14:52:06
The Green Book of Housing Market release conference & 2009-2010 Housing Situation and Policies Seminar, co-sponsored by Institute of Finance and Trade Economics Chinese Academy of Social Sciences and Social Sciences Academy Press (China), was held in Beijing on Nov. 16, 2009. At the conference, the first green book of housing market Annual Report on Development of Housing Market in China (2009-2010), completed by the Urban and Real Estate Economic Research Office of CASS Institute of Finance and Trade Economics, was officially released.
Green Book of Housing Market, comprehensively applying theories of microeconomics, macroeconomics, public economics etc., has established a housing analysis framework, which is centered with housing market, supported by housing market players, extended with housing market potential, based on housing macro-background and guaranteed by public policies. The book analyzes the housing market operation status in China from 2008 to 2009, and predicts the development tendency of China’s housing market and its major problems and challenges in 2010. Meanwhile, it also makes policy suggestions on how to promote the healthy development of China’s housing market.
Green Book of Housing Market proposes a multi-indicator index system in order to measure the quality, risk, efficiency etc. of China’s housing market. The system includes listed housing corporations index, housing affordability index, real housing supply-demand gap index, urban land market value index, housing market value potential index, housing loans risk index, housing market regulation index, housing social security index etc, which would reasonably assess the healthiness and rationalization of housing market’s critical aspects.
Green Book of Housing Market states a viewpoint that due to the plummet of global finance and economy in 2008, the adjustment of China’s housing market has been interrupted since the beginning of the year and housing industry, though not included in the list of national industrial revitalization, was actually still regarded as the main force of GDP rally. Therefore, the introduction of various favorable housing policies, large amounts of liquidity injected by financial institutions and financial markets, and the overwhelming speculative demand and certain rigid demand together worked for the housing industry; as a result, the industry was unexpectedly rescued from the desperate situation of 2008; it got through the toughest year of 2008 and then outbursted rapidly; the housing price engulfed the decline of 2008 just in a few months and has reached a new historical peak.
Green Book of Housing Market presents China’s housing market and its relevant economy, finance and policies since 2008 as below: the global economy has been gradually stabilized from a deep recession; China's macroeconomic has bottomed out from the rapid decline; urbanization quality has been significantly improved and the urbanization in central and western regions has speeded up; housing financial market has changed from tight to loose; housing developer enterprises has turned from a sharp deterioration to a rapid improvement; housing consumption, investment and willingness of investment and speculation have been repeated; credit monitoring has at first changed from tight to loose, then from loose to tight; the housing assets and property markets has been adjusted from falling to rapid increase; the housing land market has also been gradually warming up, rather than cooling down again; the security housing construction has been intensified and the security coverage area has also been expanded.
Green Book of Housing Market predicts that: in 2010, the global economy will recover slowly, but the global housing market performance will differ from each other; Chinese economy will continue to revive and the housing investment will play an increasingly important role in it; the urbanization scale has achieved a peak, while the urbanization regional growth are relatively balanced; the housing assets and property markets will first boost then drop, and the price will be stabilized and the sales volume will increase; the residential land market will rise in sales volume and price; the housing financial market will gently ascend and fluctuate in growth.
Green Book of Housing Market points out that the current housing market is confronted with severe challenges. Macro-economy: endogenous driving force is insufficient and the inflation pressure is building up. City development: public expenditure faces great stress. Developer enterprises: risks are increasing while quality is declining; the plenty of funds has encouraged the rising of land price and housing price. Demand subject: the investors are eager for action and the consumers are irrational, so the market will face a demand shock. Financial institutions: methods for risk prevention and control are limited, for relaxation would stimulate speculation while tight policy would inhibit consumption. Housing market: it’s difficult to achieve steady price and increasing sales volume at the same time, and the market will fluctuate frequently and intensely. Land market: a serious shortage of land supply appears, thus land prices rises rapidly. Financial market: large amounts of liquidity flows into the housing market and the single market results in excessive concentration of risks. Market regulation: the regulatory tasks become more onerous and the regulation willing is somehow relaxed. Social security: it is difficult to implement the security housing construction program and the supply and demand of commercial housing are affected.
Green Book of Housing Market sorts out the problems faced with the housing market for a long time. Macro-economy: it faces the fluctuation risk, potential risk of bubbles and has suffered from a stagnation risk. City development: the urbanization growth has been slowed down, so the competency of urbanization can not fully release. Development system: the market monopolization leads to high profit, thus results in costly administrative control. Demand subject: consumers are immature in consumer psychology and not well-informed in consumer attitudes, and the consumer protection system and speculator regulation system need perfection. Land market: it is monopolized and it’s been operated and supervised by government. Financial system: the unified housing financial system leads to excessive concentration of financial risks. Housing system: the commercial housing system and the security housing system are neither completed, and they cannot coordinate well with each other. Housing supervision: the regulation and management system is crude and the supervisory and balance mechanism is imperfect. Housing regulation and control: the regulation measures are not economical and the paces are ill-conformed to each other.
Green Book of Housing Market makes detailed suggestions on housing regulation and control in 2010. The book points out that the primary mission of housing regulation and control in 2010 is to encourage the steady, healthy and rapid growth of macro-economy and housing market, i,e., to ensure the fast growth of macro-economy and meanwhile prevent it from inflation, and to guarantee the vigorous growth of housing investment and protect the housing market from ups and downs. The policy goal is to stabilize the price and increase the sales volume. To be more specific, the goal is to activate the stock, enlarge the increment, adjust the structure, stabilize the prices and expand the investment, that is, to realize the basic stabilization of prices, the steady growth of investment development and sales volume, and the significant rising in the proportion of small family and security housing.
The book proposes the refinement of housing regulation and control. Supply management: according to the market change and goal requirements, we should take different measures to treat different market suppliers; for the providers of high-end properties, we should implement heavy tax policies; while for the security housing developers, we would carry out incentives and subsidies policy. Demand management: we should implement the differential demand management policies which inhibit the speculation, guide the investment, encourage the consumption and expand the security. Space management: one of our emphasis monitoring objects is the impact and speculation of international hot money in the first-tier cities; another is the hype of domestic speculators in first-tier and second-tier cities. According to the economy development, income level and its development, different measures should be taken to guide the supply-demand policies in different regions and cities. Time management: to tackle diversified market performance in different seasons, departments of monetary, land and finance, especially the monetary department, should make plans in advance, grasp the rhythm and adopt appropriately tight policies. The specific measures are as follows: in the first quarter, emphasis should be put on the land, and security housing and the consistently high loan growth rates should be moderately lowered; in the second quarter, strengthen the measures to facilitate supply, meanwhile reinforce the security housing supply and moderately tighten the consumption support; in the third and fourth quarter, enlarge the policies of stimulating consumption. Market refinement: adopt policies of credit, tax, finance and land and differentially treat the supply and consumption of high-end, middle-end and low-end commercial housing and security housing; adopt heavy tax policies on high-end commercial housing, adopt preferential policies towards low-end commercial housing supply and consumption and give rewards and subsidies to the enterprises which participate in the security housing constructions. Expectation management: to manage the expectation based on the situation of macro-economy and housing market, the government should take appropriate and constantly changeable response measures, crack down the market speculation and guide the reasonable return of supply and demand.
The book proposes the principle of regulation policies. We should adhere to the regulation principle of easing quantity but accurate delivery, differential treatment with strong implementation, policies combination in time and space, and integration of long-term and short-term policies to solve both the temporary problems and the root causes. The easing quantity but accurate delivery mainly means the housing credit loans (land etc. included) should adopt insistently the relaxation policy of accurate quantities, and further refine the delivery subjects, so the loans can be delivered to the exact supply-demand subjects. The differential treatment with strong implementation means we should adopt and further strengthen diversified policies to treat security, consumption, investment and speculation. Take further policy measures to more effectively curb the speculation and guide the investment and to make further progress in encouraging consumption and extending security. The policies combination in time and space refers to comprehensively use and coordinate the land, finance, tax and the regulatory means and adjust constantly according to different time and space. The integration of long-term and short-term policies to solve both the temporary problems and the root causes means that we should combine the goals of 2010 with the long-term goals, and the current problems of achieving the goal with the long-lasting and fundamental problems, and timely reform the systems and mechanism, together with the introduction of concrete measures.
The book proposes the measures of regulation policies. Macro-economy: fine-tune the macro-economy, stimulate endogenous growth and prevent and control the inflation. City development: dig the urbanization potential and improve its quality. Development enterprises: publish the housing reference prices and promote the urbanization quality. Demand subjects: encourage the housing consumption, guide the housing investment and inhibit the housing speculation. Housing market: complete the housing market system and encourage the housing consumption. Land market: enlarge the supply scale of housing land and increase land utilization efficiency. Finance institutions: strictly control the speculative housing loans and facilitate the real housing demand. Market regulation: regulate the market access conditions and strictly supervise the market behaviors. Housing security: implement the security housing construction program and practically enlarge the security housing supply.
Green Book of Housing Market also proposes countermeasures and suggestions on how to solve the long-term housing problems. It sets the overall goal of housing development as follows: to ensure the stable development, to endeavor for the constant prosperity, to promote the economic growth and to realize the goal that all people have houses to live. The emphasis should be put on solving the problem of the national economy structure and the housing should be strategically re-oriented in the national economy; long-term mechanism for encouraging the steady and balanced housing development should be established. We should construct a three-dimensional integrated housing development system, re-constructing the housing development system of the commercial and security housing, the housing development product system of the commercial and security housing and the housing development institutional system of system, strategy, policies and regulations.
Below are the specific measures: complete the construction of social security system and enlarge the construction scale of security housing; improve the institutional environment of city development and dig out the urbanization potential; innovate the housing system and establish and perfect a reliable legal system; build up a smooth and effective regulatory system and opposing monopoly in housing market field; improve the manner of government involvement in market and promote the government service quality; form a fair and reasonable tax system and realize the transfer payment system of housing allocation; found a housing policy committee and build a unified but flexible regulation system; establish a hierarchical housing system which integrates the differentiation of commodity and policies; build a housing system combining together the housing re-production processes, commodity and security.
The report is an important policy-making reference and research reference for governments of all levels (especially the city government), domestic and foreign enterprises, associated research institutions and the public.
Nov. 16, 2009
Enquiry call:
The urban competitiveness research group of CASS Institute of Finance and Trade Economics
For more electronic news release and information, please refer to www.gucp.org.