Welcome back to real estate regulation。
Resolving the wealth of real-estate investors through a “earth-and-land” mentality should not be the object of real-estate regulation. Real-estate reform is intended to reverse china’s economic structure and allow it to move back from a capital bubble country to an economy dominated by the real economy and dominated by industrial wealth。
The current regulatory policy is manageable, using monetary instruments to raise interest in a one-way direction towards the real estate market, while the overall austerity rate increase model has not yet been implemented. Further work on the basics of real estate policy refers to property taxes, and those who wish to earn property gains through housekeeping will find that on the day the property tax was introduced they were covering up with a dream of nam ko。
Property taxes are bound to be introduced, and policies are well prepared for this. Information currently available indicates that the authorities are developing property tax standards. The relevant departments define the criteria for identification of the two units, using the family unit as the basis for the future set of property taxes; wang jilin, deputy director of the policy and research centre of the ministry of construction, states that the rules for identification of the two units will soon be in place and will include the definition of adult children within the family, which will set the criteria for identification of the family; the last criterion is the identification of the national network, which is not linked to each other in our civil administration system, banking systems, property systems, and asset systems, and that there is no internet connection between the civil administration system and the banking system, and it is difficult to monitor the acquisition of different houses. Possible policies include inter-urban housing information networking and identification of family housing units through accurate information on property transactions。
There is also unconfirmed information that the pilot of property taxes in four cities has been approved by the state council. Chongqing, shenzhen and beijing will be launched in advance, while the shanghai pilot will be delayed until the expo. Whether it is true or not, the broad path of the property tax is to select a few air-to-air pilot cities for a pilot roll-out to the country as experience is gained。
China's real-estate market is unlikely to be able to repeat its madness in anticipation of property taxes, which has significantly reduced the need for china to raise interest rates。
For the time being, the market interest rate has not been significantly affected by the market downturn. On 22 march, the shanghai interbank interbank dismantling rate (shibor) remained generally stable; the seven-day shibor rate continued to rise slightly; the march rate remained stable; and the semi-annual and one-year interbank lending rate has been on a slow-rising path since this year. That is, banks have tight expectations for long-term liquidity。
More importantly, the decline in housing prices could cool the real economy. A study by the international monetary fund, published in 2003 in chapter ii of the world economic outlook, examines the stock price indices of 19 industrialized countries between 1959 and 2002, and the housing price index of 14 countries, which began in 1970. The author notes that the total by-product of the decline in real estate prices is much more severe than the catastrophe caused by the stock market depression. In other words, as real-estate investment declines, there will be some stagnation in GDP growth associated with investment。
Perhaps china’s base currency distribution has not declined, but the currency multiplier will begin to decline as real estate falls, so it will also have the effect of reducing liquidity. My country has more than a dozen times its currency liquidity, while the united states currency multiplier is only 4. 21 times. This suggests that china's financial system has a strong ability to expand its creditworthiness and that the capacity to generate liquidity far exceeds that of the united states. And, according to relevant studies, the country's real estate turnover rate has a clear effect on macro-liquidation and inflation, and as soon as the real-estate turnover rate accelerates, the country's macro-liquidation and inflation expectations are magnified, and vice versa。
Many feared that, when the real estate market went down, funds leaving the real estate would enter other areas of investment, leading to further inflation expectations. This is an illusion that, like the major economies of the world, we have not experienced a dramatic decline in real estate and a tumultuous market for real estate. Look at the sea-south bubble break out. After investors have withdrawn from the real estate market, and after banks have reduced the financial leverage for real estate, the rate of currency turnover in our country will inevitably decline。
In september 2009, media reports indicated that the total housing price in china had exceeded $9 trillion, more than twice the GDP. Despite the absence of accurate data, it is generally possible to infer that the gross house price in the country is two to three times the GDP. As house prices fell, the wealth of the high-level handlers was wiped out. Other than that, from 6 to 20 april, the shinwan real estate index fell by a cumulative 19. 42 per cent, with a total market value of $24. 175 billion, as a result of the rapid decline in the real estate sector. Books of wealth have become the ancient garden of eden。
China’s currency multiplier is declining, with a decline in one-quarter paper financing, short-term financing and a rise in medium- and long-term loans, which reached about 130 per cent in mid-march this year, and which cannot flourish in the market due to the tight controls imposed by the bank。
What is most feared now is not that inflation will follow the downfall of real estate, but that economic growth will decline after the downfall of real estate, and that the government will reverse its regulatory policy with a speculative attitude, bringing real estate back into china’s real economy, so that reform will be abandoned。
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