This article is from WeChat public account: Fortune North (ID: real-wealth)
“20,000 yuan, buy a suite”, “320 square meters of duplex high-rise only sell for 150,000”. In 2019, a news that house prices have changed to cabbage prices has caused a fire in Hegang, a small town on the northeast side. A group of “vagrants” looking for homes even bought a house here. But more Hegang people are asking: “Are people outside crazy?” Looking beyond short-term factors, the exhaustion of resources and the outflow of population will eventually make Hegang’s development weak due to anemia. Cities are also a life. Some cities will continue to grow, and some will age until they die. The fate of shrinking the city not only happened to Hegang.
China’s urban structure is standing at the beginning of a new era. In the past, active urbanization was scattered, and in the future, it may be passive centralized urbanization. From an objective point of view, the thinking of urbanization has to change. On the one hand, there is no limit on housing prices in the core cities, and it is an indisputable fact that housing prices in Beijing, Shanghai and Shenzhen are almost the highest in the world. The occurrence of cabbage prices is not accidental, and the pressure for urban differentiation is increasing. For the first time, the reference to a “shrinking city” appears in the National Development and Reform Commission’s document, revealing an important message: China’s urbanization thinking has begun to change from developing small towns to becoming strong cities. So, for non-core cities like Laiwu and Hegang, will house prices still outperform inflation in the future?
To answer this question, we still have to return to the relationship between supply and demand. For non-core cities, the problem of outflows is the biggest problem facing the local area. If the continuous net outflow of the population for 3 years or more is considered to be a contraction of the city, then according to the data from 2015-2017, there are 26 cities that can be considered to be contracting cities. Hegang is one of them. In these three years, this small town with a population of barely 1 million had a net outflow of 38,000 people. In other words, 1 out of 25 people choose to leave. Such an example is by no means a case. From the perspective of geographical distribution, 21 cities are concentrated in the three provinces of Northeast China, including 8 in Heilongjiang, 7 in Jilin, and 6 in Liaoning. HappeningThe most serious population loss rate in Qitaihe City of Heilongjiang Province reached 13% in three years.
One is the shrinking of the urban economy. From the perspective of economic aggregate, only 8 cities in the shrinking cities have an economic scale of more than 100 billion, of which more than 200 billion are only 1 in Jilin City, and the economic aggregate of the remaining 18 cities Both are below 100 billion. From the perspective of economic growth rate, the actual GDP growth rate of 21 cities was lower than the national average level, and Tonghua City even experienced a substantial negative growth, reaching -5.7%.
The second is the mismatch of urban resources. In the past, the development ideas of cities were basically expansion and then expansion, and did not realize the importance of “small and beautiful”. A phenomenon that has been caused is that some urban populations are declining, but the area is expanding, and the urban population density is declining. For example, in Jilin City, the household registration population decreased by 190,000 from 2010 to 2017, but the area of built-up areas increased by 23 square kilometers, resulting in a population density decrease of 4.3%. This situation means that there are fewer people, but there are relatively more facilities for urban construction, resource mismatches occur to a certain extent, land resource allocation efficiency is reduced, and public services could not have obtained higher quality resources. The rate is even lower. At present, Chinese cities need to enter, and they are also entering the stage of efficient use of land resources and sophisticated urban development. Urban development needs to be more compact, which is also an important reason why small and medium cities are allowed to shrink and lose weight.
In terms of incentives, the economic slowdown caused by resource depletion, structural imbalances caused by industrial changes, geographically remote transportation inconveniences, and population and capital outflows caused by siphon effects are the four most important causes of urban contraction the reason. The loss of population in non-core cities has led to urban shrinkage, which has led to a continuous decline in local demand for real estate. In the long term, downward pressure on real estate prices is greater. Hegang is definitely not a case, and more Hegang will appear.
Many people say that the three or four lines have risen well in the past two years? Indeed, in the past two years, there have been more than 60 cities with housing prices in the country exceeding 10,000, of which nearly one-third are third- and fourth-tier cities. However, it must be noted that This round of third- and fourth-tier city housing price increases is mainly borrowed. Exogenous demand created by inventory, and these exogenous demand is obviously not sustainable, and it is now clearly unsustainable.
First, the monetization and resettlement of shanty towns has been tightened in an all-round way. That is, the investment demand generated by the compensation for shanty towns’ demolition and reconstruction has weakened. After more than two years of hard work, destocking of real estate is nearing completion, and the shed reform policy will also undergo drastic changes. It can be seen from the central government’s policy arrangement on shed reform that the pace of shed reform is slowing down.The proportion of monetized resettlement will also gradually decrease. In 2017, the proportion of monetization of shed reform in the country was about 60%. In 2018, this proportion was reduced to 50%. In 2019, it may be further reduced to 40%. It is expected that the monetization of the shed reform for third- and fourth-tier cities may significantly reduce the demand for house purchases, lack of support for rising house prices, and there is a certain downside risk.
Second, the spillover demand created by the squeeze-out effect of the first- and second-tier cities is gradually weakening, and the cost-effectiveness of the third and fourth cities is decreasing. In the past two years, the differentiation between first-tier and second-tier cities and third- and fourth-tier cities has become more obvious. The real-estate market in first-tier cities is relatively deserted. Second-tier cities are relatively stable. Third-tier and fourth-tier cities are still undergoing final madness. The housing price gap has gradually narrowed, the price advantage of third- and fourth-tier cities has gradually disappeared, and the arbitrage space has gradually narrowed. With the opening of the “grabbing war” in core cities and the first publication of the National Development and Reform Commission, the expression of “largely increasing the size of settlements” in megacities is weakening the spillover effect of core cities and increasing the agglomeration effect. The market demand for real estate in non-core cities is declining.
To sum up, the outflow of population and economic stagnation have caused non-core cities to show a contraction trend, leading to a decline in long-term demand in the real estate market. At the same time, the shed reform monetization bonus and the “spillover effect” of first- and second-tier cities supporting the rise in housing prices in the early stage have subsided. In the overall environment, downward pressure on housing prices is greater, and the market is only supported by a small amount of improving demand and the needs of surrounding farmers to enter the city , It is difficult to continue the previous upward trend, and it may even fall, and house prices may not even beat inflation …
This article is from WeChat public account: Fortune North (ID: real-wealth)