Talk about real estate seriously!

Author: Zhi Sir source: Mr. Zhi (id:zhixs10)

January August autumn high wind howls

A top selling real estate with a cumulative sales amount of 4.4 billion and involving more than 1700 households was shut down due to the misappropriation of a huge amount of regulatory funds, which is not uncommon among the uncompleted residential flats in the country.

Curiously, the head of the sub branch of the regulatory bank came forward to clarify that the fund allocation had been approved and approved by the relevant departments, and suggested the owner to call the police.

The relevant person in charge of the housing authority over there said that the bank’s statement was inconsistent with the facts, and the bank should be held accountable.

The two sides tear down the face of harmony and prepare to go to court, but no matter how they shirk their responsibilities, they can’t avoid the most widely questioned point, how the funds were misappropriated?

If you follow the most basic pre-sale process, it should be like this:

After the developer gets the pre-sale certificate, the consumer starts to borrow money to buy a house. After the bank approves the payment for 30 years, it will deposit the money into the regulatory account of the designated bank, which is the public account of the developer.

The money in the regulatory account is divided into key and non key. The non key regulatory funds are reviewed and issued by the bank itself, involving few projects;

The largest proportion is the key regulatory funds, which require developers to declare the project progress and use, and submit them to the local housing authority and other departments for review. During the review, they will go to the site to inspect the progress, calculate the quantities, take photos and keep them. After the review and confirmation, they will be handed over to the bank, which will be responsible for the cashier.

At first glance, there seems to be no problem with the whole process, which is quite standardized. However, many aspects of the implementation of this process need to be carried out by people. It is man-made. In particular, there are some “hidden rules” that cannot be put on the table, and the probability of problems is high.

For example, in the initial payment process, when buyers swipe POS machines in the sales office, they rarely look at whether the contract account number is a regulatory account, and it is difficult to distinguish the name of the company in the account. What is the blood relationship between XX Real Estate Development Co., Ltd. and XX business Management Co., Ltd., and they rush to make payment one by one for fear of falling behind others.

Therefore, the capital flow of this link has become a mystery.

Of course, the housing authority is also against this, requiring that the online signing must be filed within the specified time, that is, no matter how the developer flickers and misappropriates funds in the initialing link, anyway, the money in the regulatory account must be right before the contract takes effect.

This shows that if you buy a house without online signing, either the building is sold secretly without a pre-sale certificate at all, or the funds have been misappropriated, and there is no way to fill the hole in the regulatory account.

Even if the funds successfully lie in the regulatory account and successfully sign online, the real test has just begun.

In order to misappropriate funds, it is a necessary basic skill for developers to falsely report the progress of the project. The problem is that the money in the regulatory account must be earmarked for special purposes, and it needs to be transferred to the accounts of the general contractor and the construction party.

Often at this time, strong developers can easily press the head of the general contractor’s younger brother with the advantage of Party A, ask the younger brother to issue an invoice of 5million yuan, and then give the 4million yuan back to the eldest brother, and then agree to return 5million yuan with interest one year later.

Although the accounting period was disgusting, many construction parties accepted it. Holding the 5million business tickets given by their eldest brother, they worked hard for a whole year, spilling countless sweat, and finally came the bad news of the developer.

Some developers also follow the court line, which is much more coquettish.

First, let the company supervising the account sign a contract with any foreign company to form a creditor’s right and debt relationship, and sign a compensation agreement in the contract.

When the company that regulates the account defaults, foreign creditors can apply for the court to transfer the funds from the regulatory account. After all, in the past, no one could have predicted that a large number of cosmic real estate enterprises would explode. Later, this loophole has been blocked, and the court is prohibited from misappropriating funds from the regulatory account.

Let’s talk about the role played by banks, which is not the innocent image of doing things on the back of the pot and being angry on both sides in the news.

As a profit-making stratum of real estate, banks are responsible for collecting deposits, lending and interest. In the real sense, they lie on their backs to make money without taking any risks. Of course, they will not bear the responsibility, so they will throw the pot to the housing authority and cause trouble.

Although the situation in different regions is different, there is no doubt that banks play the role of regulatory funds. They must always keep an eye on the financial situation of real estate enterprises, pay attention to the sales statements and receipts, and be vigilant about any capital changes.

But how does reality do it?

In order to win the mortgage cooperation of a real estate, attract high-quality real estate enterprise customers, and offset the annual deposit KPI, the internal risk control can turn on the green light throughout the whole process. Even some local banks only put 30% of the down payment into the regulatory account, and the other 70% of the mortgage loans into the developer’s own private account, ignoring the clear requirements of laws and regulations, that is, mess.

In Foshan, the city where I live, the housing and Urban Rural Development Bureau has reported two cases of bank irregularities this year. One of the sub branches arbitrarily transferred the pre-sale funds from the regulatory account because it was worried that the developer could not repay the debt on time. The subtext was that it didn’t matter whether it was rotten or not. Anyway, I couldn’t lose money.

Another sub branch did not deposit the mortgage loan into the regulatory account, which was a routine operation.

These two cases fully illustrate the essence of banks, that is, they are only willing to lend to large customers with abundant funds. Once the customer’s capital chain is short, they are more motivated to withdraw loans than anyone else, and do not bear any social responsibility and risk.

So if you want to be innocent, the bank can’t be listed at all. Stand aside and wait for a while.

Finally, let’s talk about the housing and Urban Rural Development Bureau.

There may be no defects and loopholes in the audit process. They all work according to the rules and regulations, and the process is rigid. What’s the problem?

I’ll just mention one point. The housing construction supervision departments in many regions, especially in small counties and cities, are probably understaffed. A head of the office supporting the appearance, a clerk responsible for calling and notifying to fill in forms, an employee responsible for docking with the bank’s guidelines and seals, and some temporary contractors have killed no more than 4-5 members of the team.

What kind of workload do these people need to face?

Just the most common small county, there may be hundreds of projects under construction at the same time, with an average of nearly 100 buildings under construction, and an endless stream of real estate enterprise specialists.

The daily affairs of the Department are enough to break their legs every day, not to mention that they often go out and run through dozens of construction sites to check the progress one by one, and use the most rigorous and subtle attitude to incarnate detectives as crime scenes to catch engineering loopholes. What field research, photography and evidence collection, energy really can’t do. To be honest, there seems to be no performance reward if you do it seriously, no punishment if you don’t do it seriously, and no performance if you don’t carry the pot, then let it be.

Developers deliver bound materials every day. As long as the procedures of the documents are complete and there is no problem with the process, the fund approval can be passed quickly. In that sentence, no one knows that these cosmic real estate enterprises will queue up to explode.

Moreover, there are hundreds of billions of funds in the regulatory accounts. There are hundreds of such regulatory accounts in the county. If they are allocated one month early or one month late, how much interest difference can be generated before and after, and even affect the high turnover rhythm of major real estate enterprises. The ship is sailing with great momentum. The capital chain of tens of billions has been tightened. Who will anchor and brake the ship.

The core of all this is just the signing of the director of the supervision department… Therefore, it is time to test the comrades’ clean hands and fight against corruption.

In short, local governments want to sell more land, and banks also want developers to get more land and loans. Developers themselves are more willing to seize the market with high turnover, so as to make a large-scale listing.

The premise of three wins is that we must misappropriate regulatory funds.

The consequence of the disunity of rights and responsibilities is that the strong man in Nancun bullies the buyers and is weak. Only the world where the buyers are injured has been completed, and even if it is unfinished, it is impossible to return the house, refund the down payment and stop providing.

The role of each interest chain believes that the misappropriation of funds in the account is only related to a real estate, and the risk is accurate and controllable, which is an isolated event. But I don’t know that behind the circular lending, there have been a series of holes and foam. Finally, the capital chain is in short supply, and behemoths have been crushed by a small amount.

In July 2021, the Ministry of housing and urban rural development issued the notice on continuous rectification and regulation of the order of the real estate market, in which the misappropriation of transaction supervision funds became one of the priorities of the rectification.

Some provinces and cities have begun to implement relevant rules to allow owners to check the balance and disbursement of regulatory accounts in real time, but owners are ordinary people who are seriously short of time and energy, so that customer supervision can only say that nothing is better than nothing.

The institutions that really should bear the regulatory responsibility are all hiding behind.

Two vast expanses of wind set clouds ink

The watershed of China’s real estate industry is 2010, which marks the beginning of the silver era.

After that, the transaction price of local land auction is getting higher and higher, the profit margin of a single project of developers is also getting lower and lower, and the attribute of private enterprises also has natural disadvantages in financing. The loan interest generally goes to more than 12%, and private high interest lending is a routine operation.

High prices, high interest rates, high risks, slow cycles, slow returns… How to live proudly was a life problem that real estate enterprises pondered at that time.

Finally, I figured out that only high turnover and high leverage can save myself.

Vanke was the first to put forward the “5986 principle”, that is, five months to start construction, nine months to sell, and the first month to sell 80%, of which 60% are residential;

Later, country garden was adjusted to the “4568 mode”. The building was sold in April, the payment was collected in May, the funds were withdrawn in June, and the next project was invested in August, which was rolled to the extreme, and even there were very strict indicators in terms of construction period:

The project will be dismissed after more than 40 days from delisting to commencement, and the construction period is more than 7 months.

The project starts immediately after delisting, and the total reward project is 200000. For each day of delay, the reward will be reduced by 10000. If the project starts in 20 days, the reward will be 0.

Originally, the total profit of a real estate was 10%, which needed to be sold out in two years according to the progress, and the average annual profit was only 5%. How to improve the profit margin? Misappropriation of regulatory funds, high turnover + high leverage, the project cycle is compressed to 6 months, the profit margin can reach 20% if you do two orders a year, and the profit margin can be more than 10 times if you grab 20 projects in a year.

Drinking soup behind the local government is not as enjoyable as eating meat, but drinking ten bowls of soup at the same time can also achieve the satiety effect of drinking poison to quench thirst.

Therefore, high turnover real estate enterprises are usually crazy, adhering to the concept of “pay performance or pay corpses” to attack cities and occupy land across the country, spending money like land at a premium. Slow turnover real estate enterprises either can’t join, or stick to one mu of land, slow farming, or be merged.

The real estate industry does not need to compete for scientific and technological content, industrial chain advantages and talent reserves. What it competes for is capital intensity and contacts. It plays the snowball model of financial companies. It expands rapidly through high debt in the housing price rise cycle, which is even bolder than Tsinghua University and Peking University.

How high is the leverage of these high turnover real estate enterprises? Let me talk briefly.

In the early stage of land acquisition, real estate enterprises can get a development loan from the bank, which is used to auction land.

After getting the land, the construction can be carried out. The initial project mobilization, plus or minus zero (foundation construction), until the main structure is capped, is basically paid by the general contractor, and the wages of migrant workers are also owed first.

After the cap is completed, the developer can get the pre-sale certificate to sell, and can “legally” misappropriate the down payment +70% of the mortgage. At this stage, the developer can’t get all the pre-sale funds at a cost, and it’s simply empty handed.

The money is mainly used to repay bank loans, and pay all the project costs owed in the early stage, accounting for about 70% of the total amount. In addition, the supporting fees for water, electricity, gas and heating have to be paid in a lump sum without delay.

Therefore, this stage brings great financial pressure to developers.

If it is sold out at the beginning of the housing price rise cycle, this funding gap can be filled quickly. But once the real estate is unsalable, the end result is either delayed delivery, reduced allocation of public facilities, or simply uncompleted, becoming a uncompleted residential building without electricity and water.

Therefore, it is often the best time for developers to run away at the stage of building capping, which is the reason why many uncompleted residential buildings are left there after capping.

It is not difficult to continue the construction of uncompleted residential flats. The construction and installation cost of 2100 square meters is enough. The most troublesome thing is the bond dispute. No one knows how many debt black holes and how many pledge and second pledge are involved in this real estate. Even the construction party has put in so much money, preferring to stop work and force the owner to defend his rights to see if he can recover some losses.

After the three red lines came out, the playing method of empty handed white wolf in real estate was cut off. It required 30% of its own funds to buy land, and limited the proportion of loans. All of a sudden, it hit the seven inch lifeline of real estate enterprises accurately.

Of course, even if there is no unfinished business, there is no need to expect much about the quality of houses under high turnover. The overall decline in the quality of real estate generally occurred after 2017.

In order to catch up with the progress and continuously compress the construction period, the construction team dared to continue to cover the new soil layer before the floor concrete was completely dry, and the sea sand dared to sneak into the river sand, and most of it was not cleaned. After the building was handed over, the residents would start to guard against structural risks.

There are many profit points for real estate that can be dug.

We all know that the shared area in China is to learn from Hong Kong, but no one has the energy to measure the building area of elevator shaft, pipe shaft, staircase, garbage lane, power distribution room, basement and partition wall. It is all the area that the developer says, and how many greasy things are hidden in it?

Now Hong Kong has canceled the public sharing, even if the total price has not changed, but the significance behind it is that everything can be clearly priced, even if the unit price is more expensive, it is not willing to let developers secretly collect wool.

When can we cancel it in China?

Fine decoration is also a big part of profits. When some cities begin to strictly limit prices, the problems of wrong goods and serious reduction of distribution are common.

Some experts also said that “the pre-sale system is popular and reasonable all over the world, and the cancellation of the pre-sale system is more detrimental to home buyers”, but did not explain why the uncompleted phenomenon caused by the pre-sale system is the only one in China.

Hong Kong used to have some uncompleted residential flats. How did it plug the loopholes later?

5% of the deposit will be paid to the developer, and the rest will be paid into the trust account established by the lawyer in the bank. After obtaining the permission and approval, the loan will be made to the developer according to the progress of the project, and it is forbidden to withdraw the money in advance.

In addition to the extremely low proportion of down payment, the overall supervision is not very innovative. The key point is that before the delivery of the real estate, the buyer does not need a mortgage loan, and once the real estate is uncompleted, the buyer can get back all his house money + interest.

As for the risk of unfinished business, who is responsible?

Bank, because it is not innocent at all.

In order to find a pool of funds that can be borrowed and used at any time, many real estate enterprises will choose to participate in local banks and then smoothly issue financial products to avoid regulatory risks.

Banks also need these real estate enterprises to improve their capital adequacy ratio, and are more willing to approve development loans to make money together and eat hot and spicy food. Developers’ misappropriation of funds would never be so easy without the help of ghosts in the bank.

Only when the bank bears all the risks of uncompleted projects, will it be more concerned about the construction progress of real estate projects, the changes of account funds, the financial statements of real estate enterprises and the release of regulatory funds than anyone else. This is the responsibility of the bank.

At present, some places have tried to promote existing house sales.

On May 7, Hainan announced that from that day on, existing houses will be sold for commercial housing constructed with newly transferred land, and Hainan has also become the first province in China to fully implement existing house sales.

According to another report, Fuzhou will auction a residential land on August 5, and the government has clearly proposed that “the land will be sold as existing houses”.

We don’t need to discuss the pre-sale mode. The root cause of the problem is not here, nor is it a high turnover mode or a high leverage. The biggest problem is the inconsistency of rights and responsibilities. The responsibility that should have been shared by developers, banks and local departments has become the responsibility of the people themselves, and they have not received any benefits, which is unreasonable.

So I advise these experts not to try to whitewash the truth, which is very dangerous.

In autumn, it is indifferent to dusk

The high turnover mode of real estate enterprises is basically the same, and the rhythm of thunderstorms is certainly following suit.

Once there is a serious cash flow crisis, the only option for enterprises is to continue their life by financing. Then financial institutions at home and abroad will downgrade their credit rating and close normal financing channels.

In order to survive, real estate enterprises choose to stop cashing accounts and owe funds to upstream and downstream suppliers. Collective shutdown and unfinished business appear at this stage.

With the determination of breaking their wrists, some real estate enterprises quickly sold their core assets to try to save themselves. However, except that Wanda, which sold at a high level in advance a few years ago, can successfully transform, none of today’s real estate enterprises can save themselves successfully.

Because no matter how to cut the meat and sell it, the returned funds can only be used to offset the debt, and even the more the debt is repaid, the more money it owes, because while the company is downsizing, its sales and profits will fall simultaneously.

There are two ways left for these real estate enterprises. One is to endure until the creditor goes bankrupt before himself, so there is no need to repay the debt; The other is to endure until the next housing price rise cycle. After all, there is no debt difficulty that cannot be solved through housing price rise.

Jiazhaoye, once known as the immortal bird, was frozen all its assets in 2016 due to the default of US dollar debt, and its debt reached 30billion yuan in a short time. How did it finally survive?

The soaring housing prices in Shenzhen directly led to the sharp appreciation of the land reserve in jiazhaoye’s hands, which not only paid off all debts, but also made a lot of money.

I don’t know whether jiazhaoye can bear the risk of dying again. Instead of waiting for house prices to rise, it’s better to endure until creditors go bankrupt first.

I unequivocally support the serious crackdown on economic crimes, and call for a thorough investigation of the cashing, stock reduction, misappropriation of funds, tax evasion and other acts of senior executives of real estate enterprises.

Many real estate enterprises, large and small, whether universal real estate enterprises or local real estate enterprises, are heavily indebted, and their balance sheets are quite ugly. The bonds of this year have been announced to be extended (delayed), and the second half of this year will soon usher in the cashing peak of the first extension. I am not very optimistic that they can repay their debts, and it is estimated that there will be a second extension, a third extension

Life has been relatively difficult, and it is even more impossible to get land. The members of the once brilliant 100 billion land sales club now only have three cities in Beijing, Shanghai and Hangzhou to guard the door.

In the first half of this year, the national land transaction amount, many institutions’ statistical caliber is different, some say that the total land sales in the top 100 cities is 1.63 trillion yuan, some say 1.13 trillion yuan, but these data compared with the same period last year, are mercilessly halved, down 50%.

The land transfer fee is precisely the most important source of income for local finance.

The three carriages that drive GDP are investment, consumption and export. That’s right, but for most local governments, export and consumption are the most difficult and cannot be changed by human will.

The fastest way to generate GDP is investment. In addition to the general public budget revenue and the profits of local state-owned enterprises, the most important source of investment money is land transfer fees, that is, land finance.

Both the first and second tier cities and the fourth, fifth and sixth tier counties have launched various planning policies around land finance, such as investment attraction, tourism demonstration areas, new towns, school districts, housing and shed reform policies with various gimmicks, and the whole is bustling.

Local governments, which have long relied on land finance, are often overwhelmed and confused when they encounter the current rotten market. Thinking about various measures to protect the property market, they often have poor results. Because I’m used to being extravagant at ordinary times, I can’t stand shrinking my clothes and going on a diet a little.

Finally, I went on the old road – let the urban investment company shoot the land.

The urban investment system can be said to be the characteristic economic product of the new era.

If local governments want to develop the economy, they need a lot of financing, but because the government has no right to borrow money from financial institutions, they can only set up an urban investment platform first, endorse it with government credit, and then inject land assets.

At this time, the urban investment company with doubled value can take the land mortgage and borrow money from the bank.

The bank used the deposits to lend to the city, which not only solved the local financing needs, but also did not violate the provisions of the law. It simply killed two birds with one stone.

Therefore, urban investment companies must do everything possible to improve their financing value, including but not limited to municipal greening, road maintenance, gas power supply and tap water, finance, characteristic agriculture… In fact, local urban investment is like a big pot, which can plug everything in, so it can naturally become an excellent target.

What is the relationship between the disaster caused by urban investment and the explosion of thunder and my place?

After building public welfare assets such as parks, scenic spots and public schools, the urban investment company, which plays better, has not handed them over to public units for a long time, but stayed in its own name. Everything is to increase the scale of assets, get tens of billions and hundreds of billions, and then mortgage loans to banks, or even issue bonds directly.

This loophole was finally blocked last year. It was expressly prohibited to use public welfare assets as collateral, but the plank road was built openly and secretly. Some urban investment can fool banks by changing the land planning use on the real estate certificate, fooling one by one.

If you pay close attention to the two rounds of local auction in your city this year, you will find that the main players in land acquisition are companies with local government background, such as XX city investment, XX property management, XX traffic investment, or large central enterprises such as China Resources poly Zhonghai. Almost few private enterprises show their faces and have been lying flat.

The land acquisition rate of local urban investment is more than half:

In December last year, a city in the coastal area where “the first light of sunrise shines first” staged an embarrassing scene of land shooting. Without any competitors, the local urban investment group raised the price four times by itself, winning the residential land at the floor price of 16600 / Ping, with a transaction price of 1.081 billion and a premium of 106 million.

What kind of spirit is this?

The staff later said that the land had set a “secret base price”, and the bidding, auction and listing process did not violate the procedures.

How outrageous is this floor price?

The average price of the surrounding buildings on sale is 13000 yuan / square meter, 10000 yuan / square meter, 15000 yuan / square meter, while the auction price of this urban investment is 16600 yuan / square meter, and flour is more expensive than bread.

Let’s take a look at the GDP of the city in 2020, which is the penultimate in the province. The general public budget revenue is 17.6 billion yuan, and the expenditure is as high as 28.7 billion yuan

This is only a microcosm. According to the data of the Ministry of finance, in the first five months of this year, the local general public budget revenue was about 4.62 trillion yuan, a year-on-year decrease of 8.9%.

It is not difficult to explain the helpless action of the local government to entrust the land price. The left-hand city investment takes the land at a high price, and the right-hand bank evaluates and lends at a high price. The money will flow smoothly to the local hands, the land finance can continue to be maintained, the salaries of civil servants and teachers can be paid again, and the people-friendly policy of tax reduction and fee reduction can continue to be implemented.

This is very similar to the online shop bill swiping mode, and big banks will not cooperate with local governments to play this game.

The blanket has been cold like iron for many years

At least, the local government will not worry about the problem of thunderstorm and uncompleted land acquisition, which is relatively guaranteed. Moreover, taking advantage of the low price to reserve land, anyway, the financing cost is low, and it will not be a problem for three or four years.

When the new round of real estate reshuffle is completed, all the left are Big Macs. If there is no grain in hand, how can we stop poly China Resources? By the way, the net profit of poly in the first half of the year was 10.7 billion yuan, a year-on-year increase of 4.1%, and the net profit of China shipping was 19.23 billion yuan, a year-on-year increase of 10.9%.

Of course, the urban investment that still dares to get land in the market is at least a little confident. The government’s thigh behind it is still thick enough to be fearless of the wind and rain in a short time.

However, the urban investment debt in many places has been completely countless. The financial data of the city is quite ugly, and the banks dare not approve the loan, so only the local rural banks reluctantly cooperate.

The real estate boom in the early years made countless private hot money pour into urban investment bonds with an annual interest rate of 10%. No one would doubt that the local auction market could not be maintained, and no one saw the amazing debt behind urban investment.

In fact, many urban investors don’t need to consider how to pay off their debts. Anyway, they can’t pay off all their lives. What they can do is to ensure the normal renewal of stock debt as much as possible, stabilize the debt ratio every year, and it is good to be able to repay interest enough.

Even if a few urban investment companies can’t even pay the debt interest and have no cashing ability, they can have a debt restructuring at most, which will be postponed for 20 years, and the interest will not be paid in the first 10 years, and the interest will be reduced from the original 7.5% to 3.5%.

Well, the example I mentioned is Zunyi Road and bridge, the largest urban investment platform in Zunyi, which may also be the ultimate destination of most urban investment. This is an objective and unchangeable situation.

As an enterprise, local urban investment is actually very contradictory. It does not pursue interests, nor does it follow market rules. It is half official and half business. It does government things in the name of enterprises and enterprises in the order of the government. Naturally, it has become a heavily affected area of crony. A large number of CHILDES who have nowhere to live are stuffed into empty pay to make a living, and no one dares to offend. In the end, temporary workers and dispatched workers are still working. How can it get better.

Therefore, we can often see some paradoxical situations. Mingcheng investment has obtained the best quality project in the city. Mingming has many franchises and countless good cards, but it has the ability to make no money or even lose money.

Apart from other things, the quality of the real estate developed by Chengtou itself is generally not very good, and the average price is still more expensive. Later, they gradually recognized the truth of life, simply took charge of land auction, and then found real estate enterprises to cooperate in the development.

If you can’t even count on the city investment, some cities that I’m not convenient to name have begun the divine operation of living beyond their means.

Some auctioned the franchise rights for the unified distribution of food materials in the canteens of public schools, administrative and public institutions and state-owned companies in the city in the next 30 years, covering 80000 teachers and students and nearly 20000 public officials, with a starting price of 180million;

Some auctioned the franchise rights of 13651 public parking lots in the city for 20 years, with a quotation of no less than 370million (many cities have it);

Some use a fine “monthly ticket”. As long as the driver pays a fine of 1000-2000 in advance, the traffic and transportation supervision team can ensure that the “customer” truck can be unblocked within a month, whether it is overloaded or super high;

Some have sold the exercise right of 500 freight cars in the urban area, and they will not be restricted by trucks; Others sold part of the franchise rights of advertising carriers in the next 20 years at a price of more than 100 million.

All the above are examples exposed in the news.

During his term of office, he sold wantonly and transferred the tax revenue of e-Cheng to 90 years later, regardless of the monstrous floods.

This is the tip of the iceberg where many counties on the 567 line are financially troubled.

At present, the biggest risk is still the rural cooperative structure, that is, rural commercial banks, rural credit cooperatives and rural cooperative banks. The director of the financial stability bureau of the people’s Bank of China said that 99% of the banking assets are within the safe boundary, with a total of 316 high-risk institutions.

What should these high-risk institutions do?

If we refer to the Asian financial crisis in 1997, when the bad debt rate of Chinese banks was more than one-third, the state finally directed capital injection and established three major asset management companies (AMCs), after stripping all the bad debts of the banks, they were able to light up and be listed in US and Hong Kong stocks for financing.

However, the current bad debts of banks can no longer be carried out according to the method of that year, and the environment has been completely different.

Above is the ground, below is the sky.

In 2021, the total profits of 5000 listed companies in China were 5.1 trillion, and the profits of the six major state-owned banks exceeded 1.27 trillion.

Large banks have always played a role of lying and making money. When the central bank lowered the reserve requirement and released water before, in order to avoid risks, it was unwilling to sacrifice the non-performing rate of the bank, resulting in the purchase of all urban investment bonds and state-owned enterprise bonds and risk-free arbitrage.

As a result, the money released has returned to the government, causing the financial system to idle, contrary to the original intention of releasing water.

Or reluctantly grant loans to some large households who don’t need much money, and then the large households flow all their money to the stock market and real estate.

As one of the vested interests under the pre-sale system, it is time for banks to stand up and take social responsibility, cancel the owner’s debt, and recognize the legalization of loan suspension.

But what I’m worried about is that from the many countermeasures issued recently, banks have the intention to transfer risks to ordinary people.

They may pack uncompleted residential flats into asset packages, and then turn them into financial products that ordinary people can buy equally. After all, financial management is at their own risk, and even if they lose money, they don’t have to guarantee the principal like buying a house.

Therefore, please treat the financial management project launched by the bank with caution, understand whether there are some unfinished assets hidden in the project, be vigilant in marketing, and stay away from risks.

The wind and rain do not move, and peace is like a mountain

I don’t know how to solve the end of uncompleted residential flats and where the real estate industry will go in the future.

Many people have very complex feelings about the property tax, both hoping for it to come, but also afraid of it to mess.

The difficulties related to the collection of real estate tax on the Chinese Internet are also listed in great detail, such as double taxation, collection standards, national networking, evaluation methods, maintaining the tax base, proxy holding disputes, yin-yang contracts, selling shocks, and so on. However, in the final analysis, these are only implementation level issues.

Here, the public should reach a consensus, that is, the reason for the Levy of property tax, which is not to regulate house prices, but to supplement land finance and increase local fiscal revenue, which is the fundamental.

If you really want to suppress house prices, you don’t need to be so troublesome at all. Just shoot a lot of land directly, and the supply exceeds the demand.

Over the past few decades, the real estate industry has attracted a huge amount of funds, so that the poor local governments are no longer stretched. They can build high-speed railway airports, connect high-speed hydropower networks, gather together to upgrade the industrial chain, and make important contributions to economic development. We should recognize the positive role of the real estate industry.

Obviously, the current real estate industry has completed its due historical mission, and even extended its service. There are great problems in the pre-sale model, so the introduction of real estate tax is logical.

It can supplement and gradually replace the past land finance, limit the financial ceiling of real estate, burst the foam, crack down on speculation, and allow funds to be pumped out of this reservoir and then flow to the real economy.

Real estate has kidnapped too much money, and everything is impossible to talk about. Don’t say anything to make consumption as hot as the weather. If you want to eat an ice cream in hot weather, you will be stabbed.

Just because of the epidemic and the unsatisfactory economic environment, the real estate tax objectively has the side effect of suppressing house prices in the short term, so this year does not have the conditions to expand the pilot cities of real estate tax reform, but it does not mean that it will not come out in the future.

According to the data released by the central bank in 2020:

The housing ownership rate of urban households in China is 96.0%, the proportion of households with one set of housing is 58.4%, the proportion of households with two sets of housing is 31.0%, and the proportion of households with three or more sets of housing is 10.5%.

How to collect the initial real estate tax?

We can start with the class with four or five sets and a total family area of more than 1000 square meters. After all, most of the wealth is concentrated in the hands of a few people, such as aunt Fang, corrupt officials with hundreds of real estate in their hands, and so on. These are not ordinary people.

Some voices also said that the real resistance to the reform of the real estate tax is internal, and it is impossible for vested interests to cut themselves with a knife. It would be too shallow to think so. Those vested interests who only care about some fixed assets in their hands are not registered in the list of key anti-corruption crackdowns. How high can they affect the implementation of Dafang needle?

If you look back at the wheel of history since the founding of new China, in every major event, Party members are the first to crush themselves step by step and set an example, so as to promote the reform to continue to move forward.

Back to the property tax, even if the current total market value of real estate is reduced by one third, at the tax rate of 1%, there are still trillions of taxes.

Moreover, the release of property tax is certainly not an immediate and comprehensive replacement for land transfer fees. The two can operate at the same time, and then gradually reduce the amount of land transfer fees.

After all, the current urbanization rate has come to an end, and the demand for infrastructure is not as strong as in the past few years. Why did the land transfer fees soar in 2020? It is because of the outbreak of the epidemic that the amount of land sold across the country soared, and the supply far exceeded the actual.

For example, a huge cultural and tourism city can be built in a desert Gobi desert. Who should live in it?

In 2020, land auction was unrestrained, and the state issued a policy of three red lines and double concentration of land auction, completely curbing the dependence of local cities on land sales.

So how to transition?

A simple formula:

Property tax + land transfer fee – local expenditure = balance of revenue and expenditure

Both the property tax and the land transfer fee are open source, so that the proportion of the property tax is increased step by step, the land transfer fee is gradually reduced, and the most important thing is to save money. Local governments can spend too much money.

Looking at the debt ratio of all provinces in China, Guizhou ranks first with 803%, Hubei ranks second with 786%, Sichuan ranks third with 776%, Tianjin (768%), Chongqing (741%), Jiangsu (732%), Hunan (657%), Yunnan (642%), Gansu (605%), Jiangxi (561%).

In the past, a large amount of Blackstone oil flowed out when digging the soil casually, and the difficulty of obtaining it was very low, resulting in amazing extravagance and waste. A large amount of oil was wasted without restraint.

Dushan County, with only 260000 people, was able to borrow 40 billion yuan, with a per capita debt of 112000, and built a nationally famous Water Department building;

Hegang, with a population of 900000, has an annual fiscal revenue of 3.8 billion and an expenditure of 15.7 billion, including tens of billions of wages and welfare expenditures of government staff;

An ordinary college spent 19million yuan on orientation training and introduced 23 Filipino doctors who were transferred from export to domestic sales, with an average cost of 840000 yuan per doctor;

In order to build image projects and facilitate the sale of land to create GDP, many cities have less than 8billion annual finance and only millions of people, so they will spend money and people to build twoorthree billion subways.

Too many examples will not be expanded.

For the chaos of overstaffed administrative institutions, waste of land resources, high construction of urban investment debts, wonders of uncompleted residential flats, local protectionism, disorderly competition, and wasteful expenditure of colleges and universities, the state has issued three applications and five orders and issued countless notices, which may not produce much effect, and there are policies and countermeasures.

I just hope that the national unified market can play a regulatory role, break local protectionism, reduce the waste of resources in the administrative power planning economy, and curb the growing local debt.

In the past, the rough development model that every region should be small and beautiful, with complete industrial chains and new towns and satellite cities is a thing of the past. It is completely unrealistic to want everything.

In the future, the core big cities will be responsible for driving economic growth, and the small cities will cooperate with each other, follow the route that suits their own cities, and then maintain the fiscal expenditure of all regions through transfer payment. Only in this way can we achieve a real soft landing… I hope there will be a good ending.

Finally, I want to say.

The epidemic is very bitter, and all living beings suffer, but suffering is not wealth, and suffering is suffering. It is not more than who can suffer, who is more painful, who is more tolerant, and the premise of being able to endure pain must be to see hope.

Everyone seems to be praising the second uncle for his ability to eliminate pain from suffering and live a wonderful life, but no one wants to be the second uncle.

The uncompleted residential building stood there in such a funny way, overlooking all living beings, watching the six-year-old girl forced to live in the dark and desolate reinforced concrete, climbing 15 stairs in the dark every day, doing her homework with a flashlight, and she couldn’t resist the cold without water and electricity.

The dreams of the Chinese people are simple and fragile. Many people buy houses for the first time and carry the burden of housing loans on their backs. They only hope to have a shelter from the wind and rain in the lights of thousands of homes. Their thoughts are generally very simple: to have thousands of buildings, to shelter all the poor people in the world, to be happy, and to be as calm as a mountain.

Some references:

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