Is the house price going up or down after the introduction of the national tenth article?

The following is Dr. Xu Xiaonian's blog, hoping to inspire you:

A few weeks ago, I wrote an article, "Why are house prices rising?" Before the ink was dry, we met the "10 document" which suppressed the house price, and a set of combination boxing was ready to come out, and the market suddenly became alert.

Will the property market collapse? Not necessarily.

As mentioned above, the root cause of high housing prices is the imbalance between supply and demand, and the price trend under the imbalance is dominated by expectations. The short-term factor that has the greatest impact on expectations is the money supply, and the long-term factor is the land supply. If we want to curb housing prices, the government should tighten the money supply and relax the land supply, but the actual policy is just the opposite. How can house prices not rise?

The new policy of the property market focuses on market prices, not market expectations. Because the long-term and short-term factors that affect expectations are basically unchanged, and the previous conclusions are basically unchanged, I am afraid that the effect of the New Deal will not be as expected by the makers.

The impact of the New Deal on the market is mainly psychological, and the deterrent effect is greater than the substantive effect. In the conjecture that house prices may go down, people turned from snapping up to breaking contracts or delaying purchases, and house prices stopped rising. But this is far from a precursor to an avalanche, and other expectations on the demand side remain the same, which has built a solid bottom for housing prices. In particular, "Document 10" made no mention of land supply and money supply. As long as the red line "1800 million mu" does not move, people will think that real estate is a scarce resource, and it is better to buy it late than early; As long as monetary policy continues to be loose, inflation expectation is a lingering ghost, and buying physical assets is the best choice to prevent the depreciation of deposits.

The key to determining the next step of the property market is of course the developer. They are not eager to sell, but take a wait-and-see attitude. Thanks to the bank's big water release in 2009 and the price of Qi Fei property market, developers have abundant cash at present, and there is no pressure to withdraw funds. Only when the capital chain is tight, developers are willing to consider price reduction promotion. The increase in policy uncertainty has intensified the wait-and-see mood.

The wait-and-see attitude of developers not only reduces the current market supply, provides another strong support for housing prices, but also reduces the current development volume, laying the groundwork for future supply shortage and future high housing prices.

Aren't developers worried that the follow-up policies will be stricter? Worry is inevitable, but how likely is it?

Nowadays, safeguarding people's livelihood is not only the will of the central government, but also the strong impulse of local governments to pursue political achievements. People have noticed that in every storm that suppresses the property market, local governments are "collective aphasia". In sharp contrast, whenever the property market falls, the local governor always tries his best to support it. People also know that this is because house prices and land prices are linked to local finance, and are increasingly linked to the personal pockets of officials.

If the property market collapses, will the central government make up for the local fiscal deficit? Didn't you say that we should stimulate domestic demand? How to pull without money? Real estate has a high degree of industrial relevance. If you really hit it hard, you will lose everything. I don't know who to sell steel, cement, glass, building materials, engineering machinery and household appliances to. In this case, how can GDP guarantee be achieved? This is the most concerned index of governments at all levels from central to local.

Even if the local government and the central government are consistent in policy formulation, the implementation of the policy mainly depends on the local government. How can the policy be implemented? It is impossible for the central government to send working groups to 30 provinces, municipalities and autonomous regions, not to mention hundreds of provinces and cities and more than 2,000 counties!

No matter how heavy the fist is, it is only theoretical. Even if it is pushed out, it is estimated that it will be held high and gently dropped.

In the final analysis, the property market is an expected game, and the expected formation comes from the calculation of interests, which is not guided by the party newspaper CCTV or controlled by editorial documents. Anything involving real money and silver can't be solved by red mouth and white teeth or in black and white. What is based on real money is called rational expectation, and what is purely deceptive is called irrational expectation. Rational expectation determines people's long-term behavior, which is finally verified in reality; Irrational expectations, in addition to creating short-term fluctuations in the market, will only be left to future generations as a laughing stock.

To reduce housing prices, we must first reverse market expectations; If you want to reverse expectations, you must first adjust your interests; If we want to adjust our interests, we must first promote institutional reform. On the premise of increasing the total wealth of society, the reform is to reconstruct the pattern of interests, straighten out the relationship of interests, and achieve a win-win situation for all parties.

First of all, we should reform the land system, increase land supply, break the government monopoly, stabilize land prices with market mechanisms, and completely eliminate the expectation that "real estate will always be a scarce resource". To reform the land system, we must balance the local financial budget, otherwise we can't cut off the connection between local finance and land.

To reform the fiscal and taxation system, we must do both, increase revenue and reduce expenditure. Open source means increasing local tax autonomy and strengthening people's supervision over the government, otherwise exorbitant taxes and miscellaneous taxes will increase and social stability will not be guaranteed. Cutting expenditure requires a drastic reduction in local government expenditure, especially endless investment, as well as endless institutional expansion and redundancy.

Abandoning the reform, blindly trusting the administrative power, and simply relying on policies to regulate housing prices are like taking a cold bath with a high fever and giving people a sauna, which will treat the symptoms rather than the root cause. In the short term, housing prices may fall slightly. When people realize that the fundamentals have not changed, prices will rise again and may hit another new high. So what should we do?

There are two possible countermeasures. One is to let it develop until the bubble bursts, such as 1989 in Japan and 2007 in the United States. Second, "fighting landlords" and "fighting local tyrants to divide fields", the real estate industry was nationalized, and the government came forward to redistribute housing. Either way, the cost seems too high.

It is better to tighten monetary policy and promote reform as soon as possible.