Vanke Chairman Yu Liang once again warned that the real estate industry has entered the “black iron era”
Yu Liang of Vanke is a whistler of real estate industry.Compared to Wang Shi’s arrogance, Yu Liang seems to prefer low-key.But this did not hinder the foresight of his vision and strategy.On February 11, 2022, Yu Liang warned the real estate industry again.Yu Liang said that the real estate industry has entered the “black iron era” and entered the stage of shrinking the balance sheet and clearing the balance sheet (i.e., de-financialization). Vanke will make a desperate effort to tighten its belt, not fly first class, reduce all kinds of expenses, and at the same time, demand a new development model and adjust the business layout.Back in 2018, real estate was still hot.Vanke’s slogan of “live on” was mocked by peers selling anxiety, expanding scale is still the goal of most real estate enterprises, almost no one will know that a year later the wind has changed so fast.The real estate industry is not short of courage, Evergrande, Sunac are still advancing.Yu Liang fire, vanke was calm again.In fact, Vanke’s performance in January 2022 was not bad, with sales of 33.5 billion yuan. The sales during Spring Festival were much lower than in previous years, but the overall ranking was second only to Country Garden (sales of 50.4 billion yuan in January 2022).But there is no denying that the 2022 home buying boom did not realize the highlight again, which is just a microcosm of the real estate industry.The golden age of real estate is over.What accounts for the rapid development of real estate in the past two decades?Not land policy or monetary policy, but capital intervention.It’s all about leverage, the financial industry.The real estate enterprise takes the land and then mortgages it, borrows money from the bank, sells it quickly, the owner makes the down payment, borrows money to buy a house, and the bank makes a profit at both ends.Real estate enterprises expand scale, issue bonds or finance through trust institutions, continue to take land, in short, the snowball is rolling bigger and bigger, quietly debt billions or even billions.Borrowing, financing, all kinds of operating costs are rising, but someone has to pay. Who is paying?It’s the average person, the owner of the house.The real estate industry’s contribution to economic development is undeniable, but it also has an impact on other industries. If the real estate industry is so profitable, why should it engage in scientific research or manufacturing?Any enterprise that does not aim for profit is a bully.Times are developing, and the wind is changing.We will ensure that housing is not subject to speculation and that the three red lines are not touched. This is our general direction.Real estate de-financialization has become a foregone conclusion.In line with market expectations, the supply and demand relationship, the population outflow from small cities, the potential purchasing power is decreasing.What does it mean that big cities are increasing supply, concentrating supply?It means a lot of houses.When investors no longer speculate in real estate, they will not blindly invest all their money in real estate, resulting in a rapid rise in housing prices.Not only that, what is the heart of real estate?It is resource matching.Buying a house is not buying concrete, but a possession of resources, such as schools, parks, natural landscapes, etc.School is the key.However, the trend is to equalize educational resources and enroll students nearby.School district housing in the near future, will be truly meaningless.Of course, the era of black iron does not mean that the real estate industry will collapse, after all, this industry involves many upstream and downstream industries, affecting the whole body.House prices are not caused by a single factor, housing enterprises are just porters.Stability is what matters most.But at present the real estate industry has indeed entered the downtrend period, is the transformation or lie flat?No one will know the answer.Crisis is also an opportunity, any industry development to a certain extent, will encounter a bottleneck period.Vanke has warned, compared with each housing enterprises are also thinking of a new way out.How to win the market, how to seek a new way of development, who can dominate the market ups and downs, let’s wait and see.