Real Estate Investment Growth: The Optimist and The Pessimist

Another estimate of Chinese real estate inventory is below, the economists argue partial construction and planned construction can't be counted. Real inventory is much less than claimed by economists making high ball estimates of 10 years of inventory, and is probably closer to 3 to 4 years of sales.

In this article, we will be the construction area and land reserve all included in the real estate inventory views questioned, including the construction area should be excluded when the completion of the area, the construction area should be excluded sold Forward House area, new construction area construction area exists inflated cause false high, most of the land bank should not be included in real estate stocks .

Our study of macroeconomic and microeconomic data of listed companies that the current real estate high inventory does exist, but the inventory to a period of about 3--4 years, well below market estimates of around 10 years to melt cycle . Although the real estate investment growth is unlikely to rebound over the last 20% of the high growth rate, but the second half of 2015 sales pick up, to reduce the pressure on the stock, real estate investment in 2016 grew faster than in 2015 is almost a certainty, we expect real estate in 2016 total investment growth of 5-10%.

Stressing that the fundamental ideas presented again at the end of 2015: 2016 "return period", the Chinese economy has passed the inflection point L type, paranoid bearish Chinese economy will be brewing a big mistake, the long-term bearish on the bond market, long-term bullish on commodities, firmly optimistic about the fundamentals driven the stock market "healthy bull."

On calculating real estate inventory:

Estimation of real estate stock market there are three:

First, consider only the stock of premises "sale area." December 2015 an area of ​​720 million square meters of real estate for sale, for sale residential area of ​​4.7 billion square meters, divided by their 2015 real estate sales area of ​​1.28 billion square meters, 1.12 billion square meters of available real estate inventory to a period of 0.56 years, housing stock to the period of 0.42 years.

Second, consider the real estate stock "sale area + construction area." December 2015 Real Estate stock was 7.2 + 73.6 = 8.08 billion square meters of residential stock was 4.7 + 51.2 = 5.59 billion square meters, divided by their 2015 sales area available, real estate inventory to a period of 6.3 years, housing inventory to period of five years.

Third, consider the real estate stock "sale area + area + construction to get to the undeveloped area." Undeveloped area in which to take no reliable indicators of official statistics, Bureau of Statistics and the area of ​​land to be developed this year were the acquisition of the land area is much smaller than the actual situation (annual purchase volume multiplied by the area of ​​the year was significantly less than new construction area). Market by the Department of Homeland construction land transfer area is estimated undeveloped area of ​​about 80 billion square meters, through bidding, auction estimated area of ​​undeveloped area about 40 billion square meters, so you can get the real estate inventory to cycle 94--. 123 years, housing to melt cycle 75-- 10 years.

In 2015, the market will generally be calculated as a first inventory to cycle, then gradually receive the second, by the end of 2015 the market began to universally recognized third algorithm. Press a third algorithm to estimate, even if the Chinese real estate is not in accordance with an annual increase of land, no new housing starts, still need about 10 years to complete all the destocking.

In the above, in addition to real estate inventory to the whole period, we also calculated the housing to melt cycle (residential construction and home sales are the Bureau of residential caliber). Although the period of residence to really go lower than the overall real estate cycles, but still very high (7.5 - 10 years). Recent construction area with a view of the majority of commercial real estate, residential inventory to get cycle is only 1--2 years, this view is wrong.

A lot more detail follows, including a forecast of 5% to 10% growth in real estate investment. Overall a very bullish, optimistic view of the Chinese economy in 2016.

Wallst.cn: 房地产库存真的那么高吗？

The pessimistic view comes from Yu Yongding, quoting a Shanghai real estate developer at the Lianghui, who said real estate investment could be negative 10% this year.

Wallst.cn: 余永定：今年房地产投资或将出现较大负增长