The turning point in the eyes of real estate bosses:
Leading real estate companies "stand against the water"
Securities Times reporter Zhang Da
Less than a month after Lin Feng, CEO of CIFI, proposed that the real estate industry has entered the "Bronze Age", Yu Liang, Chairman of the Board of Vanke, has stepped into the "Black Iron Age" in his judgment on the industry.
No matter how you define it, 2022 is destined to be a turning point in a new era for the real estate industry.
So, how will the industry change this year?
How should companies respond?
Let's see what the real estate bosses have to say about the new year.
Reducing the table to clear the battle of life and death
From the "Silver Age" to "Survival" to the "Black Iron Age", as a real estate company with the strongest sense of crisis, Vanke has always been cautious in its judgment on the industry.
At the beginning of the year, Yu Liang proposed at the 2022 annual meeting of Vanke Group that 2022 will be a year for the group to break the boat and fight against the water, and it is also the beginning of a new era.
He called this new era the "Dark Iron Age".
In Yu Liang's view, the real estate industry has entered the stage of shrinking and clearing the balance sheet, which is de-financialization.
The state does not allow real estate to occupy too much financial resources, nor can it allow residents to bear a high debt burden due to buying a house, because these financial resources do not effectively support the real economy.
The so-called "fight against the water" is either dead or alive, with no intermediate state.
If you can solve the burdens accumulated in the past, you will have the opportunity to start a new journey. If you can't get rid of the burdens, you will not be able to live.
He reminded Vanke executives to stop having illusions and to clear things up quickly and resolutely.
It is a life-and-death battle.
Bi Yuliang is slightly more optimistic. Lin Feng proposed at the end of last year that real estate has entered the "Bronze Age". One month later, he further stated that 2022 is the beginning of the "Bronze Age" where ice and fire coexist.
He also believes that the entire industry has entered a period of shrinking balance sheets and continued to steadily reduce leverage. The average asset-liability ratio of outstanding companies may drop to 50% in the next five years, and will gradually decrease from an average of more than 75% to less than 40% in the next ten years. .
"This process must be painful, but the trend will not change, and if you get sick, you must be cured." Lin Feng said.
Yu Liang compared this painful process to quitting sugar after eating polysaccharides to accumulate fat. At this time, he is already heavily dependent, and he will be sluggish without sugar.
Lin Zhong, Chairman of CIFI’s Board of Directors, pointed out in his 2022 New Year’s message that since the fourth quarter of 2021, peer companies have continued to explode, market confidence has fallen sharply, real estate development has entered a period of slow growth, and the industry’s past dividends no longer exist, with low profits. Operations have become the norm, and housing companies must re-examine the risks accumulated in the high-debt expansion model in the past, and seek new growth points and new business models.
The industry will remain stable after the upheaval
As a turning point in a new era, what will happen to real estate policies, markets and enterprises this year has attracted much attention.
Regarding the positioning of "housing to live without speculation" at the policy level, Yu Liang believes that it includes two aspects: "housing and living" and "no speculation".
Regarding the aspect of "houses are used to live in", the policy may be slightly relaxed, because some overly strict restrictions on existing needs may be slightly loosened in order to effectively meet the reasonable living needs of residents.
"No speculation" means that although some restrictions on home purchases may be lifted, speculation is still not allowed, and the increase limit will remain.
Lin Feng also believes that the main tone of the policy is stability, which supports the virtuous circle of the industry and the just-needed property purchase.
Some cities may partially adjust short-term policies such as restrictions on purchases and loans due to city-specific policies.
A long-term mechanism may be introduced in the later stage, such as the introduction of real estate tax.
As for financial policy, Lin Feng believes that money will be relaxed, but there will be a lag period, and it will not be flooded.
It will take at least 3 months for the effect of the policy to appear, and the confidence and actions of financial institutions need to be further improved. The liquidity crisis in the industry is expected to last until March and April. During this period, real estate companies may continue to explode.
Yu Liang also pointed out that in the new development model, the relationship between people, land and houses may be improved.
Housing supply in core and major cities will increase, and some improvement needs that have not been met due to purchase restrictions in the past may be released in the future.
But everyone has to adapt to the reality that the industry is returning to people's livelihood attributes, and don't expect prices to rise.
As for housing prices, Lin Feng predicts that in the first quarter, due to the traditional off-season and centralized payment, housing prices will have greater downward pressure, and will hover at the bottom in the second quarter.
For the sales of real estate companies, although the start is bleak, Lin Feng expects that there may be opportunities for recovery in the second half of the year.
He said that sales in January fell by more than 40% year-on-year, and the start was very difficult. It is estimated that the first quarter will be very bleak.
Lin Feng predicts that the full recovery of market confidence and transactions may take longer. If he is optimistic, the volume and price will gradually recover in June and July.
Housing prices bottomed out, thunderstorms stabilized, and policy support worked together to rebound.
From the perspective of enterprises, Lin Feng believes that the differentiation of real estate enterprises this year will be the most violent year, especially for large-scale private real estate enterprises, it is estimated that one third of them will collapse, and another third will lose their development. In addition to the strong state-owned enterprises and central enterprises, the vacated market share will be shared by urban investment departments and localized small housing enterprises.
However, Lin Feng also pointed out that the changes in real estate in 2022 will be drastic, but after the big turbulence, it will still tend to a new stability.
Head real estate companies "long muscles"
In the face of increasingly obvious market differentiation and fiercer competition after the shrinking market size, Vanke proposed to make corresponding changes.
For example, in terms of investment, further thinking is needed. In the face of shrinking market differentiation and very limited profits, higher-quality investment is required. It is necessary to change from the uniform and decentralized investment in the past to the one that performs better in the market and has proven team-operating ability. Local intensive investment, similar to investment and development, and product teams must be built in a game of chess; in the face of an industry that is already about 10% meager profit, it is necessary to learn from the manufacturing industry for process reengineering.
As a leading real estate company, Yu Liang put forward higher requirements for Vanke. This year's last battle revolved around the three main tasks of stabilization and improvement, shrinking and clearing the table, and "growing muscles". The key is to require "extremely good" as the standard Yes, that is, to be a professional master, an all-around champion, and a long-distance runner.
"If we dare to fight, know how to fight, and are willing to fight together, we will win, and we will win very well." Yu Liang said.
In Lin Feng's view, the real estate industry is like a middle-aged eagle. Only through complete changes can it be reborn.
Change requires the courage to die and the determination to heal wounds.
Entropy reduction in tissue is like middle-aged fitness to lose weight. It is not amputation or liposuction, but it is actually through continuous exercise that fat is transformed into muscle, which truly improves the metabolism of the tissue.
Streamlining the number of companies, streamlining the upper and lower levels, streamlining departments, streamlining specialized posts, and truly creating an efficient organization with "four simplicity".
Real estate companies in danger "guarantee the delivery of the building"
For enterprises in danger in the whirlpool, how to do their best to rescue themselves has attracted much attention.
Xu Jiayin, chairman of the board of directors of Evergrande, said at the 2022 New Year's mobilization meeting for the construction of the building to be delivered and delivered is the key battle for Evergrande in 2022. various risks.
The full start of construction is the first priority. Xu Jiayin emphasized that only by doing a good job in full construction and ensuring the normal construction of the handover project can the market and customers' confidence in Evergrande be gradually restored, and then sales and operations can be resumed, and various repayments can be made. Debt to get out of trouble.
In addition, considering the lack of funds in some projects, Xu Jiayin proposed to increase communication efforts, do everything possible to balance funds among projects, and at the same time increase sales receipts and disposal of assets, so as to ensure the continuity of project construction. Assure.
Xu Jiayin also called on the eight immortals of the group to cross the sea, show their magical powers, and adopt various cooperation methods eclectically.
At the same time, he emphasized several principles: for project cooperation, cash must be returned to the special account for the supervision of the building, and the project cooperation should not just repay debts, let alone sell assets at a low price to repay debts, dispose of assets, and carry out project cooperation. However, the cooperation between units must be based on the premise and foundation of protecting the rights and interests of the company, and the partners must ensure the investment of follow-up funds to ensure the normal development and construction of cooperative projects, especially for projects that are guaranteed to be handed over.