People's Daily to Developers: With So Many Homes, How Will You Sell Them? Cut Prices.

The People's Daily is not optimistic on housing, admitting it will be difficult to digest housing inventory in a country where the average household already owns 1.1 homes. The burden will fall on developers who will need to cut prices or offer upgrades to move property.
So many houses, by the government to stimulate demand to absorb okay? It would be difficult. Weakness in the property market is not a cyclical problem. Today, our household is nearing 1.1 homeownership units, supply and demand has been reversed. Since late last year even though government has canceled all kinds of restrictive policies, and the introduction of interest rate cuts, lower pay scale, tax relief and other incentives, the property market is still slow, but the city continued to increase differentiation. This shows that the "one size fits all" and "tonic" is not suitable for the current property market.
They "can't" sit around for the market to work though:
Is it feasible for us to rely on entirely on the market to slowly digest inventory? I'm afraid not. Asset value stability in property market not only households, but also directly affect the smooth operation of macro economy. By the impact of high inventory, real estate investment in the first three quarters of this year, the direct contribution of economic growth dropped to only 0.04 percentage points. This means not only real estate-related steel, cement, building materials, furniture and many other industries had a hard time, but also brings jobs and financial pressure, and increase the banking systemic risk, how can the government sit idly by?

When we acknowledge the existence of the property bubble, trying to defuse the risk adjustment, you must choose "a poke burst" or "slow leak." Guide rational expectations, to avoid market panic caused by market "cliff-style" to fall, all levels of government duty. Therefore, this year's Central Economic Work Conference was raised from the supply side of a number of institutional reforms, in particular the implementation of the household registration system reform, accelerate the people of migrant workers, on the formation of market demand, stabilize market expectations is important.

Although the central government introduced policies to reform the bonus is released, creating a favorable environment to maintain market stability, but resolving property stocks also rely on the developers themselves, the appropriate price is the most sensible choice. Cold line always higher developer must face, from any industry will be a shortage economy to the total balance. Especially for the third and fourth tier cities, came the turning point of the real estate industry, markdowns and upgrade is the inevitable choice. After all, buy this thing, the government, experts, developers said the will not, people will have to see his face. Such a large investment in an asset, the developers did something none of sincerity, who will dig up the money to save you?
iFeng: 人民日报:这么多的房子 未来究竟要怎么卖?


  1. cutting price means home price will fall which is what stimulus is trying to prevent

    1. They can disguise price cuts with upgrades. They'll sell you a 90 sqm home at market price, but you'll get 10 sqm extra or a balcony, maybe full furnishing.