By the end of 2015, the China National Bureau of Statistics released the real estate development, investment and sales situation over the past ten years for residential and commercial buildings. Data show that in 2015 sales of residential houses is 14,690,587,400 Yuan, increase by 193.9% than 199.9787822 million Yuan in 2006; sales of commercial buildings in 2015 is 27,176,133 Million, increase by 181.3% than 96.62465 million Yuan in 2006。
Overall, both China real estate’s sales and selling prices have been on the rise, with house prices almost doubling over the past decade. However, it is noteworthy that in a few years housing prices and sales have experienced relatively large fluctuations. In 2008, the selling price of residential houses dropped 1.89% and the sales dropped 11.48%, which was the only year in the past ten years that the selling prices and sales both dropped. In 2015, the selling prices of business house dropped 2.56%, broke the nine-year-trend of house price rising.
The collapse of China's real estate industry in 2008 has a great relationship with the world Financial Crisis. The collapse of the U.S. real estate industry directly affected housing prices in China, especially in the eastern coastal areas. In addition, the declining house prices also have a great bearing on China's policies and national conditions.
In 2008, China adopted a macro-control policy when domestic prices rose sharply. Banks adopted a tight monetary policy and reduced real estate loans. Second, the acceleration of urbanization in China has led to the oversupply of the real estate market. In addition, there are some reasons of speculators and consumers.
In 2014, the real estate market changed drastically, and the prices of major cities in China dropped in a collective manner. The price index of newly-built commercial residential houses in 70 large and medium-sized cities released by China National Bureau of Statistics dropped continuously for seven months from May, with the monthly drop of 1.2% in August, which is the highest level since 2011; as for the number of the monthly drop cities, it reached 69 in both September and October, which also hit the highest since 2011.
In the long run, oversupply is still one of the major reasons for falling house prices. From an industry perspective, the real estate industry face the dual pressures of market adjustment and e-commerce impact. In addition, credit strain is also an important reason. Various banks have tightened financing for the real estate industry, personal mortgage loans have also been greatly affected.
In addition, 2009 is a prosperous real estate development year. Residential houses sales growth rate reached 58.35%, and commercial one reached 38.59%. Their prices have also increased by 24.69% and 16.73%, so 2009 is a relatively large price increase year.
In 2009, growth rate of the newly started real estate area is 5.2%, so supply is not enough is the direct cause of skyrocketing housing prices. Second, a large amount of capital is invested in infrastructure construction in the process of urbanization, leading to an increase in land development costs, which eventually leads to house prices raise. In addition, a series of preferential policies aimed at real estate stimulated by the national government to stimulate domestic demand are also one of the important reasons for the price rise. Affected by the financial crisis in 2008, in order to stimulate economic growth, encourage people to spend and ensure an annual economic growth of about 8%, the government adopted a series of measures to boost residents' consumption.
The analysis above shows there are three main factors that affect the development of the real estate industry. First, the influence of national policies on the real estate market is indirect, such as population and land policies. Second, the sustained development of the macro economy has laid the foundation for people's overall purchasing power. The third is the growth population. On the one hand, the increase of the total population increases the demand for real estate. On the other hand is urbanization. In addition, there are technical factors that change the type of real estate development products; economic globalization makes each country's economy affect each other.
According to the trend chart we can see that after 2010, the fluctuation trend of house prices is obviously smaller than that of the previous five years, and the price changes gradually tend to be stable. This is because, in 2010, China issued a series of real estate control measures, change its policy from previous support to curbing speculation and curbing housing prices from rising too fast, including various control measures such as land, finance and taxation.
In response, a spokesman for China National Bureau of Statistics pointed out that in the next step, China should speed up the reform of the real estate market system and accelerate the construction of a long-term mechanism. In particular, China should comprehensively implement policies in the fields of taxation, land use and finance. With regard to the future economic situation, he said that the overall economic operation of China is stable at present, and the stable and favorable trend will continue toward in the coming years.
