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-Action: The Relationship between variables influence on the economy of real estate

No matter what is in favor of or opposed to what should be reasonable, be logically correct, factually correct.

What is the relationship between variables? Variable relations in mathematics, also known as topology, that is an object of continuous deformation in space and time attached to the relationship between different variables. On the macro-economic terms, is to observe the major variables that affect the GDP, analysis of these variables and the relationship between GDP growth.

Let's look at the situation in 2008. 2008 GDP growth of 9.6%, down sharply over the 3.4 percent growth rate. Growth factor specific to the investment in fixed assets rose 25.5%, 0.7 percentage points over the previous year; the growth of total social retail 21.6%, 4.8 percentage points over the previous year; exports grew 7.24%, an increase of 13.21 percent over the previous year down . Only from these variables, it seems that lead to economic slowdown is mainly due to the export slowdown, or by the financial crisis.

However, if the notes in 2008 annual sales of new homes fell by 34.92 percent, while an increase of 13.5% over the previous year; noted that in 2008 the newly built commercial housing sales, declining by 19.5%, while an increase of 42.1% over the previous year; noted that the central bank had previously illogical personal mortgage interest rates significantly increased to 8.61%, it is not difficult to draw conclusions: in 2008 China's economic slowdown led to the real reason is that real estate over-tightening policy in a substantial decline.

Look at the situation again in 2009. 2009 GDP growth of 8.7%, down 0.9 percentage points over the previous year; fixed asset investment grew 30.1%, 4.6 percentage points over the previous year to speed up; social retail sales grew 15.5%, down 6.1 percentage points over the previous year; exports -16% , down 23.24 percentage points over the previous year; but only 82.8% of sales of commercial property (in 2009 4.4 trillion, in 2008 2.41 trillion), second-hand housing sales increase of more than 200% is.

For whom, we can not deny that real estate in today's pillar industry of China's economic role, unless he is a nerd, is subjective dogmatist, or ignorance, and emotional elements. My words are strong enough, but the character dictates, can not be changed. What men say, of course, sonorous, powerful, can not be submissive.

Ching Yee: Why real estate is a pillar industry of China

What kind of real estate industry? What is so important to China's economic significance, and it really is not a pillar industry of China's economy?

For a long time around these problems, all controversial. Chinese Academy of Social Sciences in a report two years ago to openly oppose the views of the real estate as a pillar industry and has remained the same. In the long ago, chief economist of the National Unification Council is certainly a high profile real estate industry as a pillar of China's economic role.

Little attention, is not difficult to find these are the pros and cons from the real estate investment compared to the proportion of investment in fixed assets to define its importance. This is certainly a very one-sided, it can be said is wrong to grandma house.

Some people saw in the real estate industry on the iron and steel, building materials, chemicals, textiles, home appliances and other industries driving force of the final analysis, only circumstantial evidence only, not as a sign of recognition pillar industries.

Many times previously on many occasions to participate in the real estate seminar experience, I found many, including scholars, including even the real estate industry, what should be classified in which all carry her clear.

It is certain that, although the output is the direct contribution of land, but real estate is certainly not the first industry; Although the house is built out, but the output of home building and construction industry has statistics which can not be the second measurement, so Real estate is certainly not the secondary industry.

In fact, the nature of the real estate industry is not complicated. Since the industry to sell the land and the main house, so real estate can only belong to the tertiary industry. These include three levels, one level of land development and land transfer, and second, the two land development and new housing sales, third, second-hand housing sales.

This makes the real estate industry's GDP statistics can be accurately. On second thought, that can not have accurate statistics on gross domestic product in the field can not be considered a separate industry.

GDP for the statistics of real estate, we must first clear their financial flows. According to official disclosure of the data, in 2009, total national land transfer 1.5 trillion yuan, 4.4 trillion yuan newly built commercial housing sales. Both the data is clear, as sales of second homes, so far can not find national statistics totals. However, I would like to remind you that, if you do not know that second-hand housing sales, the importance of judgments relating to real estate are very inaccurate. Fortunately, this is to be projected.

According to Beijing Municipal Statistics, 2009, second-hand housing sales total 0.71 trillion yuan. Based on data provided by the National Unification Council, Beijing nearly three years of the new commercial housing sales accounting for 8.56% total number, or the National total sales of newly built commercial houses in Beijing's 11.68 times. This of course can be used as a reference to second-hand data. By inference, the national second-hand housing sales in 2009 should be about 8.29 trillion yuan.

The three levels of domestic economic flow of real estate in 2009 was 14.19 trillion yuan total, equivalent to the domestic retail sales in 2008 to 1.3 times the 2008 total sales of 6.16 times that of steel. Only from this perspective, the first issue of real estate as a pillar industry, no doubt.

However, since the flow rate of the GDP is the different nature of the two indicators, which only the former were less after the transfer of Value or Value into the wealth of added value. Therefore, the real estate market economic flow on the ratio of GDP to measure the importance of their industry, in theory is not accurate enough.

In accordance with the income approach, GDP, land transfer net of government which is GDP, land development which is paid to the amount of compensation in demolition most of GDP, the two combined to account for a large land transfer flow 90%. New commercial housing sales in the operating surplus which is GDP, some of which to pay taxes on behalf of the Government, as part owner of net profits, with sales of newly built commercial housing were paid to reward employees posed by the GDP, of which at least 30 % of GDP. Be noted that sales of newly built commercial housing costs among the land, as land transfer previous years, statistics have been done in previous years, coupled with its own input nature, therefore, not as the year's GDP output. As for the second-hand housing sales, is greater than the cost of spending part of their course GDP, and as property income, household income statistics in which urban residents. It is noteworthy that in 2009 the second-hand housing sales, profitability and more than 50% to 70%, the average should be no less than 60%.

Having said that, in 2009 the GDP contribution of the domestic real estate should be about 7.64 trillion yuan, of which land transfer link for the 1.35 trillion yuan, the new sales of commercial links for the 1.32 trillion yuan, second-hand housing sales link for the 4.97 trillion yuan , together accounting for 23% of the proportion of GDP.

So, even if 40% of the total contribution rate of GDP in 2008, 10.85 trillion yuan of total retail sales of the whole society, but the contribution to GDP was 4.3 trillion yuan, while the GDP contribution of the steel industry was only 0.92 trillion yuan.

It would appear that the real estate industry as a pillar of China's economy, but also controversial you!

Given China's industrialization and urbanization target not yet reached, in accordance with common international standards probably be achieved only in half, so that should not be considered as a pillar industry of real estate point of view, pure nonsense system.

Furthermore, the property of the government revenue higher contribution rate as an important source of transfer payments, but also narrow the gap between rich and poor, the main support. So, that accused the real estate industry as a pillar of the national tragedy can only say, is quite ignorant, and too tragic.

Incidentally, since the real estate As China's economy is so important, property stocks not worth the attention you stumped!

-Action: High house prices in the industrialized lever

National Unification Council to disclose the latest data show that in 2009 the acquisition of domestic real estate development company land area shrink by 18.9%, 19.9% decline to complete the development area, housing area and completed the construction area grew by 12.8% and 5.5%, while sales surged 42.1% area , in which area home sales increase 80% ... ...

More extreme imbalance between supply and demand data, the trend indicates this year's prices are still strong, despite the recent significant price decline of individual cities.

After rising sharply last year, the national average commercial housing price (sales / marketing area) from 3,877 yuan per square meter the previous year rose to 4,695 yuan. Should be said, compared to 2008 disposable income of urban families 16,000 yuan, it is indeed a very high levels. Sensibility that now used in Beijing to sell a house, enough to buy a nice villa the United States, in Italy, bought several acres of farmland with several farm homes.

However, even though I oppose the price is too high, but from another perspective, the high price is not necessarily a bad thing.

In the previous article, I have mentioned, the land of output efficiency, the so-called industrialization, is actually a continuous process of improving land productivity and efficiency, and continuously reduce non-agricultural land, agricultural land and output efficiency gap process, or urban-rural income gap smaller and smaller process (worse, the last 15 years, the domestic income gap between urban and rural areas are not getting smaller and smaller, but growing. Now the gap than even the founding of the beginning of even more than before liberation large). Almost all countries the process of industrialization, rising house prices in the city are subject to progressive, high prices and low there's imbalance. Extended a little further, it is said that the industrialization of high prices is the lever.

The difference is, with most of the countries traversed the road of industrialization than the current high prices of the industrialization process of China's high leverage is unprecedented. This determines that China can take advantage of high prices to speed up the process of industrialization. In Beijing, every now sold a house as large as 2 million yuan output value can be achieved, including at least 70% or 130 million, an increase in value, or 50% of revenue and 20% of the operating surplus. Given prices comparable to first-tier cities in China's richest countries, while peasant incomes comparable to the poorest countries (this is the great irony of China's industrialization), the Government can Liyong huge gains from the real estate market, in efforts to narrow the income gap between urban and rural areas, while accelerating economic growth.

Another important difference is that most of the industrialized countries with high rates of leverage through private ownership of land or a disguised private, and private investment in this pathway. The Chinese government monopoly of the land, decided that only the government can achieve this leverage.

Unfortunately, so far, the Government has not yet aware of the high prices is to the industrialization of the leverage effect, despite years of government revenue increasing reliance on real estate market, including the rapid rise of the land transfer proceeds as well as various aspects of the flow tax, income tax.

Correct approach is that the Government should take full advantage of high prices to speed up the efficiency of conversion of land, and take full advantage of rapid growth of the land revenue to further promote the conversion. As a result, not only meet the increasing domestic demand for residents, the release of the growth potential of domestic demand, more importantly, you can narrow the income gap between urban and rural areas, and thus achieve sustainable economic development.

What I mean is that given the high rates of industrialization, the lever, the Chinese economy is not healthy growth, urban-rural income gap can not be quickly reduced, it is the Government's capacity problems.