Source: A Bad Potato (ID: iamhtd)
Part One
The essence of supporting real estate is industry.
A city has industries, employment rate, population, and property flow.
Otherwise, everyone will run away, how will real estate prices rise?
Looking at the real estate prices of a city means looking at its industries.
If a city loses its industries, just like some old oil cities in the past, when oil is depleted and industries are lost, there will be no one left. How can you save it? If the house sells for over 20000 units and no one wants it, you won’t even go because you can’t find a job.
Similarly, the price of a city’s real estate market is directly positively correlated with the city’s industry.
If some cities really want real estate prices to rise, it’s simply industrial upgrading.
For example, some cities are technology capitals, where high-tech enterprises cluster with millions of engineers. Some cities are textile capitals, where labor-intensive enterprises cluster with millions of textile workers. So, which city do you think the housing prices are expensive?
The principle is simple: New York is a financial city, San Francisco is a technology city, and housing prices cannot be low. In the United States, they are tied for the top spot. There are also a bunch of cities in the United States where housing prices are like onions, which is the rust belt of industrial decline.
So saving the real estate market essentially requires protecting the industry, which is a very simple and simple truth.
But why are few people aware of such a simple truth?
This year, Zibo, which has no tourism resources at all, has emerged as a model for the tourism industry. With a population of 4.7 million, Zibo has welcomed 4.8 million tourists in three months.
Correspondingly, all Zibo residents have benefited and earned money, and their confidence in their city has skyrocketed. Therefore, in the face of the bleak real estate situation in China, the year-on-year growth rate of the transaction area of commercial housing in Zibo in the first quarter exceeded 70%, leading the country.
It can be said that many local governments across the country now want to save the real estate market, but Zibo has provided the same answer as textbooks on how to save the real estate market.
Or, to put it simply, who would doubt the future of Zibo’s demonstrated management ability?
But why is no one willing to learn?
One method is to lead the people of the city to work hard and pay attention to every detail, be attentive to every corner, and truly boost the economy;
One method is to send a document prohibiting real estate companies from lowering prices, or to send another document to lower loan requirements;
This is all about saving the real estate market. Which method do you think is better?
The answer is known to everyone, and the method is also known to everyone. However, the question of whether one is willing to learn or not is like the scumbag in the class saying, ‘What’s so great about being a student bully? If I were to be like him, I would be a student bully.’.
Many local governments in Zibo are unwilling to copy this assignment, because this achievement was achieved through tremendous efforts and hard work led by the Zibo government and the entire city’s people.
The 100 points in Zibo are a 200 point effort.
But for many other local governments, they only need to put in 10 points of effort in real estate, and can also achieve 100 points of GDP, so why invest so much energy?
Just sell a piece of land, why bother me so much?
Even if many cities develop tourism, they will not strictly constrain industry prices and meticulously manage every detail like Zibo, but simply engage in a tourism real estate project to drive GDP.
That is to say, domestic demand is not something that cannot be tapped, but there is a lot of room, but some local governments are unwilling or disdainful to tap it.
This is just like Dutch disease, where one can easily earn money and no one wants to study hard like Zibo.
Or to put it like a person, if he wins 2 million yuan at the gambling table, unless he has strong self-control to stop, he will never return to normal life. He will go to the factory to screw up and earn 3000 yuan a month because he will have an illusory feeling that he has the ability to earn 2 million yuan in an hour. He will continue to gamble until he loses his last chips and starts borrowing high interest loans.
Zibo is revitalizing its industry, and once it rises, the real estate industry will naturally be revitalized.
Some local governments are also rescuing real estate, how can they do so? Not letting real estate companies reduce prices, loan terms, and down payment ratios
Nowadays, all those who are shouting to save real estate are not thinking about solving the essence of the problem, but rather thinking about opportunism and using financial means to save real estate.
Because over the past 30 years, they believed that real estate was a financial tool that could only rise but not fall.
Just like US bonds, they can be sold indefinitely in theory. Although we all know that the US can’t afford treasury bond in fact and can only borrow new bonds to repay the old ones, as long as we believe that someone will take the offer and there is no new international currency to break the pattern, this game can be played indefinitely.
But US bonds are financial products, while houses are consumer goods. Even if they are consumer goods with additional financial attributes, they ultimately need to be inhabited.
Real estate is not a financial tool, and there is a critical point in its price. If one can empty out 6 wallets and struggle for 20 years to buy a house, many people will also recognize it, and to some extent, it can also motivate everyone to “struggle”;
But once we break through the critical point and find that no matter how hard we strive, we cannot achieve our goals, more and more people will start to lie flat.
This is like when I assign a task to the sales manager to increase your sales by 30% next month, and you scold me while pinching your nose and completing the task every 996 days. When I see that this method is good, I increase it by 30% next month, but you still scold me while completing the task
I said there was such a good thing before, so I no longer put in effort to improve products and brand technology research and development. As long as I want to increase sales, I will break through ten thousand tricks and desperately pressure you with sales tasks. This is my path dependence.
Finally, one day you were so desperate that you realized that you couldn’t complete the task no matter what, so you lifted the table
Many people nowadays call for the rescue of real estate, which is similar to driving you crazy to suppress sales tasks, and at the same time, they even deceive and threaten to say that as long as the real estate collapses, people across the country will suffer.
I don’t know if the people of the whole country are suffering, but how can they save themselves?
The rapid growth of the real estate economy is essentially a form of lending finance. Currently, the per capita debt of the country is 140000 yuan, so should we continue to borrow?
Borrow 280000 yuan per person, and some people will shout for further help. Borrow 560000 yuan
Part 2
I want to set aside real estate and talk about something else.
Twenty years ago, there was a TV drama that swept the country towards the Republic. There was a segment in it that I remember very deeply, which was Japan’s plan to form a navy. All Japanese people were frugal and insisted on donating money to build the navy, ultimately winning the Sino Japanese War.
The real history is: before and after the war, the Japanese government issued treasury bond to the public four times, with an annual interest rate of 5%. With the discount price of treasury bond, the comprehensive yield was about 10%;
The war was fully supported by the Japanese people, and treasury bond was also snapped up by the Japanese, raising 116 million yen, accounting for 52% of the military expenditure of the Sino Japanese War;
This is not to mention the crazy donation of Japanese people by smashing pots and selling iron. Japanese girls take the initiative to sell and then send their boyfriends to the front line. Their parents write a letter urging their son, who is a soldier on the front line, to be loyal to their country
Without the support and support of ordinary Japanese people, the Sino Japanese War would not have lasted.
At that time, Japan’s strength was far inferior to that of the Qing Dynasty, but all the Japanese had great confidence that they could win. This confidence was the fundamental support for them to win the Battle of 1894-1895.
Why am I talking about this?
I said that the fundamental aspect of real estate is industry.
We won’t specifically say which city’s housing prices will rise or fall. In the next three years, the global economy will not be good. Japan and South Korea’s exports will plummet, Germany’s GDP will decline for two consecutive quarters, and the fourth industrial revolution is far away. The development of artificial intelligence and technology will further improve work efficiency. Improving work efficiency means that one person doing two people’s work will reduce employment rates, The only significant breakthrough at present, ChatGpt, not only fails to create consumer opportunities, but also replaces people’s jobs and kills employment rates.
Our environment, although better than theirs, is not very good either:
The overall population is declining, with a per capita debt of 140000 yuan nationwide, mostly related to real estate;
In 2023, 11.58 million graduates nationwide reached a new high; Flexible employment reaching 200 million;
So, in such an environment, if you really want to save real estate, the only way is to upgrade the industry, win the technology war between China and the United States, and completely break the blockade of the United States.
To win the technology war, all three conditions are indispensable.
The first is sanctions and containment by the United States, rather than dumping, which has already made up its mind;
The second is that we have a huge market, which is already in place, with a market of 1.4 billion yuan, surpassing the sum of American and Western groups;
The third is confidence!
To invest in the technology industry and develop chips in all fields, this is a huge industry chain that requires massive capital investment. Relying solely on government and some enterprises’ investment is definitely not enough!
The entire society needs great confidence in the chip industry.
Speaking of confidence, let me say one more thing.
From 2014 to 2022, many people will have a feeling that once the government releases subsidies for enterprises or incentive policies for a certain industry, they will soon have immediate effects.
The effect is that the next day or even the same day, the real estate agent will be moved by the wind and lead a large number of enterprises to look at the property and prepare to acquire it.
The local government issued this policy in the hope of upgrading the industry and promoting the development of technology, but the result was a large amount of subsidy funds flowing into real estate, causing housing prices to skyrocket.
The funds that can truly play a role in the field of technology or industry are very limited
Why is this happening?
Firstly, government subsidies or bank loans are not venture capital and have strict requirements for the operational status of enterprises.
But a well run enterprise does not lack money, and a struggling enterprise that wants to break through cannot receive money. Therefore, the ultimate result is that there is no money on the books, and a successful enterprise has an additional amount of money.
Don’t really criticize government policies for this. No one around the world can solve this problem because the division of labor between bank loans and venture capital is different, and no one dares to lend to troubled enterprises.
So, what will these high-quality enterprises do if they receive money?
Firstly, these funds are generally not used for expanding operations or new investment projects, because if they were to do so, they would have been able to obtain a loan of 2 million yuan through strict bank review, which would have been a windfall for the enterprise.
However, this money cannot just lie on the books, so many companies will come up with a way to spend it: buy a house!
That is to say, not to mention private investment, many of the funds originally intended for technology have flowed into real estate!
The cost of revitalizing technology has become the cost of speculating on real estate
What do I want to express?
Over the past 30 years, countless people have believed in a logic that goes against economics and common sense: they believe that housing prices will only rise and not fall.
So in the next five years, can everyone believe in something we could have done: Chinese chip and technology companies will eventually lead the world.
As long as we can muster one-third of the Japanese confidence during the Sino Japanese War, or one-fifth of our enthusiasm for real estate investment, we can usher in this technological war and embrace national rejuvenation.
So, now, now is our crossroads.
Is it to revitalize the industry or use finance to rescue real estate?
What are the consequences of using finance to rescue real estate?
In 2017, it was saved. The result of the rescue was that Hui Ka Yan firmly believed that there were no unsold houses, madly increased leverage, and finally Evergrande thundered.
Let’s not talk about thunderstorms today. If everyone believes that housing prices will only rise and not fall, who would be foolish and forced to invest in chips and technology companies, then the long-term return is a matter.
Why do I have to work so hard to save myself by buying a house?
Why do local governments invest so much effort in industrial development when selling plots of land can boost GDP?
And another result is that some people, no matter how hard they struggle, do not have a house and start to lie flat;
Another group of people, who rely on rent collection to have no worries about food or clothing, also begin to lie flat;
The next three years are crucial, and there is still a large amount of funds in the bank because it is currently a period of drug addiction cessation, and people do not know what to invest in.
After all, the past was so beautiful.
Is it to continue indulging in fantasies, creating a larger fireworks display, or to carve out a path of blood?
Choice is in our hands!