Nocturne A: Real Estate How winter? December 19, 2008 Andy Xie, Sohu blog
(Conference Record)
Moderator: Hello, we Finance sub-annual real estate forum tonight In this very old-fashioned, warm spring breezes of the zither sound start, this winter is still warm winter, however, the real estate industry really cold pressing, I was , we more and more pessimistic view on the market long ago, I met the most optimistic possible estimates of the real estate industry to adjust to the end of 2009 before bottoming out, there are a lot more pessimistic estimate, it was said was said for two years four years. As the market is changing, new changes every day, either there are always some new ideas thrown out, and I hope that in a collision on this forum, will follow during the day and tonight is not the General Assembly Like, everyone drinking, the free collision point of view, I hope that we can impact a spark at the same time give us a clear direction, how should this winter too, when the end of this winter.
me first introduce today's participants gentlemen, I speak today in order to introduce in accordance with, first, Beijing Vantone Real Estate Co., Ltd., Mr. Feng Lun, SOHO China Ltd Pan Shiyi, chairman, Mr. Ren Zhiqiang, president of Beijing Huayuan Group President, Greater China of Morgan Stanley chief economist Mr. Wang Qing, Data on guests at the meeting that these seven, we arrived at the scene along with two mystery guests, but also well aware of the real estate industry's own experts, sitting in the front row is the Vice Chairman of UBS Investment Bank Asia Mr. Cai Hongping. Cai Mr. deliberately delayed the flight to participate in our annual real estate is very grateful. well, chairman of Miss Wu Yajun Lake real estate. Now our forum, we will call this form of the guests to make a brief speech, everyone in an interactive presentation way to discuss the real estate industry trends, first Beijing Vantone Real Estate Co., Ltd., Mr. Feng Lun Feng Lun
: Thank you very much, I feel the moment, in fact, as part of our business, the most important thing is to allow us to think about One thing is how innovation and change to fight and across economic cycles, this is the most important. For example, now many people died in a village, what followed the cry, and finally you have worn out, or to other villages , or simply do not look at this matter. Now we change the external economy, complained a lot. Many wedding last year, we drank high, others Jin Dongfang, in fact, not yours, it complained a lot, others dead, your mother you also followed worry. we think is to look after all the real estate business after so many cycles, how the business is to survive, we have been a point of view, we must be against the cycle of innovation and change and jumping cycle. how? first enhance the predictability of future understanding of the law and industry, we are actually only the last two years of real estate limited at this stage, if large enterprises across time and space, the global real estate economy for hundreds of years to see if look carefully, we predictability and the future business model we are now taking and corporate governance will know. Second, we have a dramatic change in the business cycle, we can not avoid, but must face the United States 220 years, has 50 times the economic cycle each is a symbol of health, it must be a good way, through innovation and through this cycle, the U.S. science and technology, social and economic development has been enormous.
we face today, the beginning of this cycle, we, as local enterprises to research and innovation, in addition to predictable rules of how to manage the company. The second thing is how to reduce right and wrong, because I saw the business such as the book of life and death, 80% died and institutional game, less than 20% of the game with the economic cycle . That is our difficulty is that Chinese private enterprises were also the face of economic system transformation cycle. Most businesses do not die in the economic cycle, most of the game with the system of death, which gives us a lot of thinking, how do we in the economic restructuring and market competition among the unbeaten two things, this is our last talk, do business to how to reduce right and wrong, to make a decision if the reduction of both right and wrong, the decision-making done and if it leads to the four right and wrong not to do. If you steal one, causing the two non-police to find you, find you the victim, which more than a lot of trouble, so many failed companies are like this. in the company, and to be specialized, simplified, standardized, and elimination of these non-personal life there have been incremental, with the color, or in the company to continuously create right and wrong in their personal lives, including life, there can be creative on, probably around These are his home life. the third thing is the financial freedom and flexibility, so we the last mentioned, is called to listen to the words of her grandmother, Jay calls on us to listen to my mother, actually listen to the words of my grandmother, just do not listen to the words of Andy Xie, because economists are always right, especially so many problems on Wall Street, the economy experts 20 months ago, 50 months ago and today they are all very aware that, 50 months ago very few people understand. we will follow the specific research problems, and in times of crisis, we return to the simple truth is listening to her grandmother's words. such as how much capability to do many big, honest man, honest and learning a craft, this confrontation cycle and long-term development which will have a role. This is why I think the most important thing is thought the company's own freedom and innovation through transformation and innovation cycle of confrontation and beyond our, for long-term development, this is the best I think we should think about the real estate business to do.
Moderator: Feng total about his point of view, all the time in 2007 In into the bridal chamber, the industry is full of high tide, and now a period of adjustment, but I know these words of von total estimate of the situation is still relatively optimistic, but Pan is always pessimistic about the situation, I call him to talk about his views.
Pan Shiyi: I am very pessimistic about it? I was especially pessimistic, really. the first objective, said the days are very sad, we are all very difficult, difficult because some people say the U.S. got into big trouble, what caused the subprime crisis, poke a big hole in the United States may be the responsibility of Americans, 50%, China's macro-control 50% bigger hard, straining a long time. In fact, to 7-8 months to increase reserves also, in fact, already form obvious. I 24 March, when writing a blog, the day the Chinese real estate industry upheaval, many people gave me the finger Qiazhe count, in fact, you can see, if it is to save the Chinese government in March City is a V shaped, and if before the Games is estimated to save the city some time before the end, if it is again today a 4 trillion to rescue the market, when can it, I must be objective to say that I do not, and estimated expected of economists to look at. because I am limited knowledge and experience is very limited, relatively short-sighted eyes can not see when up. I think today, we are pessimistic from the beginning of this year, to today, then I am not pessimistic because the government introduced a number of policies, I do not now finds fault with all the policies issued, and not out of trouble. As for when to hit the bottom, when up and I want to have a measurable standard, the most important measure, introduced by the Government aside policy, has been very much, when the introduction of the original macro is eight States, are now ten, ten out, ten days out of every one, I will only arithmetic, count the words or more. Now is the most critical how the situation of enterprises in the end, I think to the economy up, I first look at the most critical to eliminate the bubble economy did not eliminate, this is the first one. The second criterion, each entrepreneur mistakes over time, may not be amendment, if you still come to their senses, our model would also like to move forward, if we change the mistakes in previous years, and I want to be able to recover the Chinese economy, because China is like family to me, both the money was, if the day too bad there is no justification. Thank you!
Moderator: Panzong just about now is the L-type way, when bottom is not clear that under the current government bailouts to come to disk, either in the real estate industry has always is an opinion leader, can give us a clear answer, when the real estate market bottomed out.
Ren: two discussed the afternoon listening to all the discussions people are very pessimistic about the situation, especially for the government to show full of no-confidence. In the morning I came to the broadcast, said the way football 9050, the Chinese national football team produced the new, is produced immediately before the Spring Festival that kicked two goals, and now make a request, do not lose on the line. Last May, after , there is no national football won the ball, and now do not lose the highest demand is on the line. Do not back has been very good, and this requirement seems to have not seen in 30 years this month we look at the request of Bureau of .10 of economic data, all data is also pessimistic than the Pen said, we have dropped the CPI so that we can not be happy are the degree of import and export of .11 months of negative growth, as if the economic level, could not find someone who makes you feel optimistic , and obviously, to December will also see the rise of the downward trend continued, all economic data is not one to let everyone feel that there are a few months before, when people said it better than we expected, while others say reported that the central bank to the National People's Congress expected direction of macro is the road to us, I do not know that they're still expected, but also a little bit better.
our government may feel good, some time ago very optimistic, as the discussion this afternoon will Next on the regulation of many people's confidence in the government have great doubt. is more important than faith is more important than gold, but the capacity is more important than gold. There is no ability to restore the confidence of all this is expected to solve the maximum problem, if the effect of policies can not solve the basic consumer expectations or the public expected, the efficiency will be greatly reduced, this is a question we need to discuss. I do not think the situation is optimistic that the situation be bad. surface about 24.8 million square meters of volume, see, there is a non-large real estate development, to October, when the amount of housing construction nationwide was more than 4.2 billion square meters, which means that the 4.2 billion square meters over the world except for China the amount did not add up all the buildings so much. After more funding, not ugly, real estate accounted for all 58% of the total housing starts, because the government is doing to build public life, I am concerned that so far this year in October So far we have only completed more than 300 million square meters, what does that mean? volume means that we only completed 10% of the amount of a few to start production this floor may need nine years, because we do not cover half stopped. like this building If the figures according to the present, about our failure to complete more than one billion square meters, we can imagine more serious, there are two trillion four trillion railroads, to how much steel, not exceeding 1,000 tons, with real estate How many? one hundred twenty-five million tons, which means it can not pull the 4 trillion Chinese economy, and real estate fell to the case, much larger than the 4 trillion. cover the original floor is down an average of three years, because high and low, on average, it is. Now 10% of the few means we have less than half, 50% completed, is very terrible, so bad that from, may control the volume is one hundred million 5-200000000, Now playing live, we do not completed, the house could not finish the old cover. Hainan is 4 ten billion yuan of schedule, the North Sea is 150 billion. I guess we are the equivalent of 10 trillion yuan, a very large amount of the threat, according to commodity prices. Central Bank development loans is now 5.2 trillion, of which individual housing mortgage loans accounted for 3.5 trillion, so if more than a trillion to be rotten inside, we said this is a very serious situation. this year, sales Last year, 7.7 million square meters, is now only 4.5 million square meters, up to the end no more than 6 million square meters, at least compared to last year sold 170 million square meters less, this is a very daunting prospect, this year, a decrease in steel steel should be up and walked, but why not go up steel? to because we had to start on that, useless. steel is actually not enough, but not with so much still splashed down off the middle are completed on schedule, it is now half lay-off status, do not know when to start, the market is very pessimistic, some say 23 months, but also said 29 months, some said that at least three years to keep the existing the amount consumed, it is very dangerous signal.
relatively optimistic what is it? optimistic that the central government had introduced a number of policies, the next step may continue to introduce special policies for real estate, we call President Hu Jintao We bought the house because he said the government adopt policies to improve housing and reasonable cost of reducing consumers. means that the tax cuts, less any taxes I do not know, but the only tax cuts can reduce costs. let down that he did not listen to developers you, so that people can not buy 高价房 must be the government tax cuts, the President the final say. I think this time will not exceed January 1, to more than 1 January to open the General Assembly, I guess people do not become, then began to trouble turmoil, we have the number of migrant workers do? about 133 million migrant workers, of which 82% is in real estate, including the cover I said, the government has now returned home more than 2,700 million of these people have place 1.06 million mu of land disputes, and now more than two thousand people started returning back to the land, so the case in the hard growth, labor law not allow them to day laborers, which is too bad. We will put the Central Government policies, the most practical significance is that I think personal income tax-free purchase. Shanghai implemented such a policy, when the consumption of more than 6000 square meters of housing, from the annual 12 million sales increase to 33 million, which is free of personal income tax results. I estimate that next year if the introduction of two previous sales might rebound, existing policies have emerged in November rally, the first is not short of money that the Chinese people, and the second is no shortage of consumption, the policy to someone a little money to buy a house , then do not lack economic growth is driving housing as the Chinese economy, in regard to long established, and later destroyed, so not working, I think more important is to restore the confidence of the people, there have been some rigid requirements recovery, more people have not resumed, when the last round of the men of the city depends mainly on housing reform to solve the housing problem, not the city residence of these populations rely mainly on real estate and leasing solve the problem, this round of the 2000 and 2005 surveys found that young people buy a house before a majority of nearly 70%, 05 people buy a house survey of more than 40 years of rapid growth in the proportion of people buying houses, probably an increase of 19.7 percentage points, nearly 20%, a new round of The purchase is to sell the new ones house old house people. rigid demand that we see a rebound, is to get married, have children, we first bought the house. most are waiting to see exactly what the original house, is that relatively poor house, so to wait for a good price, good location, good policy to buy a new house, or I we resist, nor is it right to have children, to be married. This difference is both regulation and this round of the previous round regulation appear before a person is not a house to buy a house, after the round of regulation time, the tight regulation of Le could not buy, because I have a firm. If we attract consumers, if only to say improve the standard income tax deduction, we may put the remaining money in the bank, tax and consumer behavior are linked. forcing people out of the money in the bank to buy a house, bought a house saved when the formation of asset personal income tax, so there is no way if you do not pull up the market. We believe that the formation of at least 07 next year, sales, or a higher development.
Moderator: General talk about any matter of fact a very crucial point, home buyers refund may be a fundamental shift in the real estate, the three entrepreneurs we have spoken to realize that their days are very much, the day is not better than the developers may not attend such a meeting, and Feng also said that the total to economists is always right, Panzong say that only an economist can give the situation in the future. The following Morgan Stanley has requested Mr. Wang Qing, chief economist for Greater China.
Wang: economist do not speak of real estate, I do not understand real estate, but I understand that real estate only from the perspective of real estate on the macro economy, we are forecasting to determine future technology is not very good indeed, I wrote a report in early September is to do a little research on real estate, writing that the issue of data, the real estate to die if the Chinese economy will not. come to conclusion that is the core of a hard landing for a soft landing for the Chinese economy depends on real estate, there is a conclusion to support my assessment, I have come to a conclusion, there is no bubble in Chinese real estate market. The third conclusion is that China's real estate policy, will in the first quarter of next year before any major changes, when the report had been written many people blame, first of all why there is no bubble, and the other policy changes that Bluff is not it? certainly have a conspiracy theory.
me explain, of course, still say for this policy. Why so look at this issue, why Chinese real estate bubble does not, or macro-economic point of view, we are very simple, we say that the bubble is that housing prices and income is too high, China is 8 times the international standard should be 3 to 6 times. My view is that First, we look at relative, 8 times, 6 times is absolute, relative average income of Chinese residents in level from 2002 to the present growth rate and growth rate of the national average house prices is basically the same. absolute view, Why not a bubble that 8 times, because our Chinese people's income is a high growth environment, 3 to 6 times the standard in developed countries may be time to buy a house in the United States could buy revenue 3 to 4 times, 5 times a bit expensive was. We note that the average income in the past was 40%, 50% growth, forward-looking words, but also a 10% increase. In other words, if we buy a house, a few years by the revenue growth rate will drop a lot, and why part of real life we see a young couple or college graduate, income of 100,000 a year may be 100 million of the money would buy a house, because revenue growth is expected soon. Think you five years ago, and now how much income difference. Unlike Europe and the United States, 2% a year, revenues are likely to increase.
fact, more than ten years ago, the World Bank did a study to investigate the world's 100 countries, found that income level in the country from 3000 to 4000 U.S. dollars price earnings ratio of 4 to 20 times with an average of 10 times, which is the level of China. This is a point of view.
another point, we buy a house, because the Chinese housing free rate was 80%, many upgrades of demand, why so high? is the process of privatizing public housing, which is the process of wealth transfer. So we buy, when to enter the real estate market is coming in with a fortune, unlike the United States to that point income take in, not coming empty-handed, there are many cases is to sell the first house, pay the down payment, this factor is also taken into account. Therefore, China's price earnings ratio is not so high, we made an adjustment may also almost 5 times. This speaking, I think the concept was no bubble. But I ask a question, if not why do suppress the real estate bubble, or that real estate in question, my view is to say, the Chinese real estate market, but not an economic issue, not a bubble, a social problem, why? fact, the Chinese real estate market I think is a mirror, reflecting mirror was that? reflect the Chinese economy, the already existing income and wealth gap before real estate is not developed, as reflected in the number of bank deposits, stock number, and now the house built there, the rich can afford to buy a house next to West Lake, the poor can not afford, and this show came out, so Section
time on the show out to you that this is a shock. For example, Hong Kong is the world's income gap is actually very high, but if you were born in the social structure, may be used to see do not feel the impact of big, ordinary people can not afford top of the house, he also accepted. Why policies must change it? when the Chinese economic slowdown, bringing the unemployment problem, so we should adjust the policy is such a logical and more out of such a judge. So in general terms, what time the real estate bottom out or adjust how long, I still do not understand, but overall, I think that from the fundamental point of view, talk about a range of issues of urbanization, etc., Overall, China's real estate market is healthy, there is some adjustment of the credit crunch, but the credit crunch is not the same, the United States markets, China is the policy of the credit crunch caused by the starting point. So the adjustment of the real estate itself Solutions the trouble should end it, from this point is concerned, we can little hope, because the adjustment does current policy, essential thing to say to see in 2009 the Chinese economy, China's economy is dependent on a hard landing or soft landing for real estate, If the real estate investment is down, such as only 6%, 10% of the decline, the Chinese added stimulus, we believe that China can achieve a soft landing, such as 7% to 8% growth, if the real estate investment dropped by 30, 40% , these control measures, 4 trillion certainly not enough. This is our judge, but this is judged by economists.
Moderator: Mr. Wang Qing just about his report of September this year, the Housing real estate market is no bubble, but Mr. Xie Guozhong in 2005 have predicted when the great Chinese real estate bubble, Andy Xie husband is 97 years has made our financial forecast, now hear what the views Xie.
Andy Xie: I do not know why the forecast is really hard to say luck or really know. I think a society like China, what new services will be said, because of what new things are too warm, so many people play the stock market, real estate real estate bubble does not appear very unlikely, so this is my starting point, so I look at the problem, then it is. I heard the real estate industry is difficult, there are many voices had a hard time say why, a matter of confidence, the people do not buy a house, are you people go on the property, the right people afraid to buy a house, confidence, real estate developers do not reduce the price. There are ruining government policies, the government suppressed. are the U.S. times We prostrate to the credit crisis, do not blame themselves, I think real estate is their problem. Chinese real estate is new, just beginning in Hainan, there is no relationship between the general people, mostly foreign to some speculation of the Chinese people this is the first real estate cycle. There are many factors behind this cycle, the first people who bought the house is rich, so that high prices, rising sales in China which has become a fundamental look at , and do not know the sample does not represent the average community, like the Chinese cars, is the high start price is very hot selling, the most wealthy people buy a car, which give the market a misleading. The other is that local government finance, which After years of adjustment, the central government in the proportion of financial increase, and many reforms are pushing the burden to local government, local government money, if the central investigation when you have not it? me no problem, I totally solve the problem , in order to boast that the central government is a good man, the next raise him. He was thinking this, so a look at money, real estate, a good advance, selling so much to make a lot of money, so an officer because there is no control in China put to all sold, the money took carry out his achievements, this increase is very fast. It is said that due to the situation today, the supply reflects the anticipated several years ago, today to sell a house, not house people are poor, think of are sold to the rich, this is a contradiction. If there is no financial crisis if it is not reported yet? difference a couple of months, the issue I think the Chinese society, the supply is not difficult, unlike Hong Kong, few people can influence government real estate, so every day to buy such a high price count the number of houses to sell, how China controls ah? Chinese real estate developers are working for the government's , how dare the government can not build so many houses that immediately give you away, do not build a house out. So the Chinese supply is unlimited, is simple to buy a house to live in China, but also think of value, but the house built as made TV, like build number ah? chief is certainly better than me, so to understand this industry, but how China's real estate statistics Statistics? the whole country to beat a house, who built many houses ah statistics? It is very hard to say for a things, the size of the problem may be much larger than we thought. So this problem has been out, has been reported, and now how to do ah? If you are on TV making more and more waste ah warehouse, to a reasonable reduction Price to sell. no one would watch TV on the warehouse, how much waste ah? So China is now so many houses are empty, it is extremely wasteful, it is our urgent task to be solved is the survival of real estate issues to give the house to sell, the problem is reduction of real estate developers, real estate developers do not support them, in fact I quite support the real estate developers, they have only debt with no money, they sell the house when the windfall is land prices high, how can real estate developers to sell the house do not buy the land? So always make back the money, if the light allows developers to cut prices, just that the bank lent more than a trillion real estate developers , the number who believe ah? loans are with the real estate related, how is this possible? loans for each country in Asia with high growth are real estate related, China has had some good, numbers brought everyone can speak their own a story. So I think awareness of this problem from the point of view, 4 trillion is 4,000,000,000,000 if we are confused, now mainly concepts. Why make something like the bureaucracy that made things, or did nothing In fact, out to the people the money to buy a house in very good shape, is not ah? now China's core problem is the people made houses, cars can not afford, had to sell to foreigners, foreigners now have no money, only to sell to the Chinese people. I think of Hunan to promote affordable housing not being made, so why make it long and short house? the now empty house into affordable housing is not like that? Hunan doing subsidies, in accordance with national policy to buy affordable housing, set amount of money, so you buy a house, I limit the total price, what area, if not the nerve to buy 200 square meters, always limit, which is then consumed a number of small units, through the sale of law that can be done. The second mortgage interest us, the Government can make adjustments, the bank is the country's, if you are to solve real estate issues, had no loans, and banks unwilling to lend him some money back if the low to be relatively large. earned three points to me, and let me out of subsidies for mortgage interest rates drop by 3 percentage points of people. There chief mentioned, the tax thing, how big a house do? tax is a solve the inventory problem, the Government eventually this matter a great responsibility to bear the ultimate pocket money is go to the government, and a house built to spend much money, land, tax money, the developer or the earned buy land, so are the Government's pocket. So the policy in place, we can consume the stock market, how much time it is also hard to say, the general real estate cycle, long cycle than the stock market, stocks go down cycle The average is three years, so no rush to buy a house, have plenty of time.
Moderator: I believe that while the three biggest real estate would you have a response. The following is our guest speaker who can successfully predict a total real estate trends entrepreneurs, is chairman of Hong Kong, Mr Ronnie Chan, Hang Lung Properties Limited, Hang Lung Properties successfully predicted the financial crisis in 97 years, always in the contrarian take, sell when the bull market, Mr. Chen decade Explorer report is a very exciting topic , and always have an accurate real estate trends forecast, I do not know how you do it Mr. Chen.
Ronnie Chan: Hong Kong's return, and belong to China, and I came to Hong Kong real estate, please embarrassed, What can I say? Hong Kong real estate is generally not stated, do not know much do not want to speak, are Danru water, I have more color, but compared to the mainland, you really are an alternative, or even your economics family have a great taste, very good. Let me first say a few words, these three words that I am now one of China's real estate market view, the first is the Chinese mainland real estate but it is still in its early stages, even in the end there no bubble, etc., you do not find out the definition of foam, foam ah, there is no real demand, but when prices rise, that is called the bubble, if there is actual demand, the price is up because the demand is not called a bubble, really needs. I have observed is really in need, there is no bubble. The second sentence is absolutely cycle can be expected, the Hong Kong property in the past 40 years the basic cycle is of great potential have caught, and I caught , which should be able to do so. Third, many people ask me how the winter, too late I said how the winter, because winter is the time to be ready in the fall, I was a little do not know how to spend the winter, because I do not need winter to winter is not good, is not truly successful real estate business.
I said, it may to you, the greater the long term impact may be friends here, no time to think to analyze, we note that when all the real estate market recovery, when you can buy a house, one, two, three years the total number, etc., I think there is one thing I hope that the mainland's friends attention, just Feng Lun said to listen to my grandmother, I say to listen to his grandfather, grandfather who? grandfather always said that any government, many government policies, there are some things not only affect the cyclical things, but also affect the structural and cyclical things no big deal to rescue the market, but some are structural things, the introduction of a long-term power is infinite, so this is a big problem in the long run, not save the market today can not be saved, the big question is now the mainland government finally decided Gaifu Li room, so what? mean less money is private, it is now 80%, about 45% of Hong Kong, if the government does not say so much, the government accounted for 30%, the overall ratio of only the remaining 70%, which is the structure of change in the long run the impact is quite large. of private, private real estate business is a good thing or bad? not necessarily a bad thing. explain what the future if the Singapore, Hong Kong as an example, look at the long-term housing to will be polarized, and some government cover things, when it is sold after the meeting, this point of view, although a small cake, but people are willing to buy a private house built, although a small cake, but said more urgent requirements variable. And the Chinese do not buy a house just to live, 80% of urban people are not not maintained, then buy a house while a housing, means of investment, the investment on the powerful, hope value, value-added, then the welfare housing will be restricted Rather, those private things private cover, but not limited to the house became very popular, so this perspective, I think it is worth noting one thing. There is also a possibility that some people do not analyze the case He said the government should pressure the housing now that I can not give more housing, I went to cover business house, which I can ...
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