What is the prospect of the real estate industry?

Recently, reports about Hurun's rich list have been heated up, especially the battle between Hurun and Ali. Gossip has never been my hobby, so I won't discuss it today, but one phenomenon caught my attention: According to Hurun Report, Xu Jiayin, Chairman of Evergrande Board of Directors, became the richest man in China for the first time with a net worth of 290 billion yuan, replacing Wang Jianlin, Chairman of Wanda Group; Ma Hua Teng, Chairman and CEO of Tencent, surpassed Ma Yun, Chairman of Alibaba's Board of Directors, ranking second with a wealth of 250 billion yuan. In recent three years, the richest people are Wang Jianlin and Xu Jiayin, both from the real estate industry, and the richest woman is Yang from Country Garden, who is still in the real estate industry. Although the proportion of the total number of people in the real estate list decreased slightly, the total wealth of the real estate industry increased. The threshold of the top 50 housing enterprises is 654.38+0.2 billion, and the average wealth reaches 365.438+0.3 billion.

Let's study a question, that is, in today's increasingly strict regulation of real estate, why does the Secretary make the most money? Why is the richest man in China still doing real estate?

First, the process of real estate getting rich.

When it comes to real estate, people all over China are familiar with it. Real estate is called the eternal pain in China's heart. While attacking high housing prices, we also witnessed the process of making wealth in the real estate industry without exception. Before 1990s, China was still in the era of welfare housing distribution, and the real estate market at that time was an absolutely stable market. Until the end of 1990s, the welfare housing allocation system was abolished, and the original capital expenditure of enterprise welfare housing allocation became monetized housing accumulation fund, and the era of real estate market commercialization began to come.

After four or five years of exploration, in 2003, the real estate market in China began to take off, and the real estate industry in China entered the leading development stage in golden decade. In this industrial stage, a large number of real estate developers have started their own era of making money quickly. At that time, the cost of land acquisition was very low, but the price of real estate rose rapidly, so basically, real estate developers could earn much more income soon after they got the land and reopened. Therefore, developers find that compressing the cycle and reducing the upfront investment are the key to making more money.

As a result, we have seen many development loans. Basically, the standard practice of real estate enterprises at that time was to use their own funds to get the land first, and there was basically no need to pay more after getting the land. They use the development loans of commercial banks and the funds that can be withdrawn from the pre-sale of real estate to continuously improve their wealth value through this leverage. Different from the ups and downs of the capital market, the real estate in China was almost a rising market from 2003 to 20 16, which led real estate developers to increase their leverage without any worries. Eventually, real estate enterprises became the most profitable industries in China, and real estate created real estate tycoons Jianlin, Xu Jiayin, Yang and Yao Zhenhua.

Since the 930 New Deal last year, China's real estate regulation and control efforts have been increasing. Many news reports began to say that real estate developers can't make money, but look at the Hurun Report. That was not the case. What happened?

Second, why is the director still making a lot of money under such strict supervision?

Judging from the overall profit data of real estate enterprises, the report of the Central Reference Institute pointed out that in 20 16, the sales scale of the top 100 real estate enterprises reached a new level, with the total sales volume and sales area reaching 48,027.1000 yuan and 4,02517,000 square meters respectively, up by 52.5% and 39.4% year-on-year. The rapid growth of sales performance has promoted the growth of income and profit scale. The average operating income of the top 100 real estate enterprises reached 392 1 100 million yuan, and the average net profit reached 4.57 billion yuan, up 36.8% and 26.2% respectively. The average net interest rate continued to drop to 1 1.0%, down 0.5 percentage points from the previous year.

There is a strange deviation in the data here. On the one hand, the real estate industry has indeed experienced a decline in performance, especially the decline in profit margins. On the other hand, the data released by Hurun Report is that real estate developers have made a fortune. The fundamental reason lies in the polarization of the real estate industry itself. For most enterprises in the second and third echelon of housing enterprises, the impact of real estate regulation is the first, so the decline in profits is almost inevitable. However, for enterprises in the first echelon of housing enterprises,

Let's carefully analyze the list of Hurun Report. Since Wang Jianlin sold real estate assets on a large scale, tens of thousands of them can no longer be regarded as a real estate enterprise, and Xu Jiayin and Yang are also experts in diversification. Let's analyze how these real estate tycoons make money:

First, the lag effect of statistical data. Let's start with statistics. Because of the vigorous development of the real estate market in the past few years, the performance of real estate enterprises can be said to be rising. After the New Deal of September 30 last year, the real estate market began to overweight. Therefore, at this stage, there will not be much problem for the performance of housing enterprises. Whether the regulation of real estate is a soft landing or not, the inertia of the real estate market still exists, and the overall market is still on the rise. Therefore, the overall rise of the real estate market may still create a higher profit record.

Secondly, the self-cultivation of leading housing enterprises. For these top domestic housing enterprises, if they still rely on brute force to make money, they can only say that everyone thinks too simple. The reason why leading housing enterprises make money now.

The first is the control of its own costs and profits. A notable feature of leading housing enterprises is hoarding land. During the period of golden decade from 20/2003 to 0/3/2003, all leading real estate enterprises in Hurun were in a state of crazy land acquisition, and leading real estate enterprises were good at counter-cyclical land acquisition. In the case of low land price in golden decade, real estate enterprises hoard a lot of land resources, which is one of the inner cores of real estate enterprises to make money. After that, it was positioned in high-end real estate to earn a higher premium than ordinary real estate enterprises. Coupled with strong cost control, on the one hand, it reduces my financing cost, on the other hand, it improves my cost utilization efficiency. However, these are just internal strengths.

The second is to innovate the profit model and broaden the profit boundary. Leading housing enterprises began to explore the diversification of profit models as early as 20 14. The combination of industry and finance has always been the direction of real estate enterprises. The trend of real estate enterprises entering high-profit industries such as finance and medical care is increasingly obvious. Last year, Wanda's non-real estate income exceeded real estate income. Wang Jianlin once proudly said that Wanda is no longer a real estate enterprise. So is Xu Jiayin, the richest man this time. When Evergrande Finance was booming, Xu Jiayin invested 3.2 billion yuan into the medical industry, and Evergrande Health was listed on the backdoor in Hong Kong.

The third is the strength in the field of common property. Community property is becoming the key to the transformation of real estate enterprises. Many real estate enterprises build their own community property platforms, make full use of their own property advantages, and turn the real estate transaction from the original one-time sale to the continuous cash flow of real estate enterprises. Through community construction, real estate enterprises can realize the final closed loop of consumption, finance, medical care and other service scenarios. Today, Vanke, Fantasia, Wanda, Yiju, Greenland and Greentown have all started their own community O2O development pace.

Coupled with diversified operations such as pension real estate and education real estate, leading real estate enterprises are still very comfortable, so real estate bosses keep winning the richest man in China, so they can only say that they still rely on real estate to make money.

Author: Jiang Han, special researcher, financial columnist and financial commentator of Suning Financial Research Institute.