LBX(SH:603883) Sou Hu Cai Jing·2025-09-29 00:57Core Viewpoint - The article discusses the critical state of China's real estate market and the implications for the macro economy, emphasizing the need for a shift in policy and perception regarding housing prices and land finance [2][4]. Group 1: Land Finance and Policy - Land finance is defined as the fiscal mechanism of local governments that possess land transfer and planning rights [4]. - To stabilize the real estate market, it is essential to abandon quantity targets and halt the influx of new land supply, focusing instead on redeeming excess properties [4]. - The current approach of relying on land sales for financing contradicts the central government's strategy of transitioning from incremental expansion to qualitative improvement [4]. Group 2: Impact of Housing Prices - The decline in housing prices primarily affects ordinary citizens rather than the wealthy, as housing constitutes a significant portion of household assets in China [4]. - The homeownership rates are notably high, with urban residents at 96.3% and rural residents at 94.8%, indicating that housing is a critical asset for the majority [4]. - The article argues that rising housing prices can help reduce wealth inequality, contrary to the belief that falling prices benefit the majority [4]. Group 3: Market Structure and Transformation - A dual-track system is proposed, distinguishing between market-driven housing and affordable housing, to ensure both price stability and housing accessibility [5]. - The article suggests that the best source of affordable housing is not new construction but rather the repurchase of excess market housing [5]. - The handling of unfinished projects should focus on rescuing banks rather than merely saving companies [5]. Group 4: Current Market Conditions - The real estate sector is currently in a downturn, with significant declines in new housing sales and investment [7][9]. - From January to August 2023, new housing sales dropped by 4.7% in area and 7.3% in value, while real estate development investment fell by 12.9% [7][9]. - The inventory of unsold properties has increased, with a notable rise in the waiting period for inventory clearance [10][13]. Group 5: Economic Contribution and Future Outlook - The real estate sector contributes approximately 20% to GDP and 40% to fiscal revenue, highlighting its importance to the economy [19][22]. - Despite its significance, the probability of housing prices continuing to rise is deemed low due to oversupply and demographic challenges [23][24]. - The article emphasizes that the real estate market must return to a supply-demand balance, as excessive price increases lead to unsustainable debt levels for developers [28][31].