Vanke is China’s largest real estate company. On Sept. 30th Vanke said, “The turning point in the housing market is really coming.” The first thing Vanke needs to do is to conduct a strategic review. The implementation of specific business operations is “convergence” and “focus”, with “live” as the ultimate goal.
A typical representative of Chinese real estate companies, Vanke was once known as a myth of China’s real estate industry. In a critical period of development of the real estate market, Vanke makes such a judgment. This represents Vanke’s concerns about the market’s development prospects.
A Housing Market “Winter” Approaches
This year, with the continuous increase in government regulation, housing companies are generally in crisis. First, sales growth is declining. Second, financial difficulties are becoming an industry problem.
There are signs that a housing market “winter” is coming. Therefore, the real estate investment is no longer a trend in the next decade. Urbanization and population aging are two key variables that determine the long-term trend of real estate investment. On the one hand, China is still in the process of rapid development of urbanization, which forms positive support for real estate investment. On the other hand, the phenomenon of aging is constraining real estate investment. Looking into the future, the aging population is suppressing China’s real estate investment. This will have a significantly greater impact than the supporting role of urbanization.
Rising Housing Costs Abound
With the high growth of China’s housing prices in the past decade, the government has clearly realized the crisis. Since the beginning of the year, the government has repeatedly stated that, “the house is used for living, not for speculation.” In short, China’s housing prices are closely related to the government’s regulation.