The real estate industry has moved from the “golden age” to the “silver age.” Will Guangzhou's major real estate giants hold their ground or transform? Where will the Guangzhou real estate market go next? …… On the 29th, at the “2016 China Real Estate Industry Leaders New Year Summit” hosted by NetEase Real Estate, industry “tycoons” including Li Silian, Chairman of R&F Properties; Huang Wenzi, Chairman of Star River Group; and Cen Zhaoxiong, Chairman of Times Property, discussed the future of the housing market.

　　Huang Wenzi stated that in today's real estate industry, “the most important thing is to hold one's ground and not transform blindly,” and that slow progress is also progress.

　　“First-tier city housing prices are expected to rise”

　　How will major real estate companies face next year's challenges? Will the housing market improve next year?

　　“I hope the market will improve next year,” Huang Wenzi said right away. He noted that the recent Central Economic Work Conference proposed stabilizing the real estate market and reducing housing inventory. “Economic development cannot do without the real estate industry. Real estate will not collapse, nor can it be allowed to collapse. I hope developers and the government will work together to promote the common development of real estate and truly protect the interests of consumers.”

　　“For 2016, the current temporary plan is also to be cautious, prepare diligently, first look at the main projects in some cities, and proceed steadily.” Li Silian believes that if products become inventory, there should be some problems with the products themselves, and product competitiveness has declined—either the price is too high or the quality is not as good as others, which is why inventory reduction is needed.

　　“I think the market in 2016 can be anticipated. Market funds are very abundant, construction volume will increase, and fixed asset investment will also improve. Everyone should seize 2016; such opportunities may not last long.” Li Silian stated that in third- and fourth-tier cities, many products are already close to cost price. In addition, after multiple rounds of interest rate and reserve requirement ratio cuts, homebuyers' interest costs are at historic lows, making it a good time to buy a house.

　　“I think the market in 2016 should be a market that can be anticipated,” Cen Zhaoxiong believes. In the past, the real estate industry was greatly affected by policies. Government policies would affect the financing costs of real estate companies. Private enterprises often went to overseas markets to raise funds, and the financing costs were actually not low. This year, China opened up the issuance of corporate bonds. Cen Zhaoxiong believes that the financing costs of the entire industry have dropped considerably, even to historic lows. This gives Cen Zhaoxiong full confidence in 2016.

　　“Housing prices will continue to rise, with different magnitudes in different cities. Even in developed countries like the UK, friends told us in the first half of this year that UK housing prices had been rising steadily for several years and recently went straight up, so it's better to buy a house early,” said Gu Yunchang, a renowned real estate expert and Chairman of the China Real Estate Chamber of Commerce Alliance, at the meeting.

　　“2016 will definitely be better than 2015,” predicted Li Mingkai, a real estate expert and Chairman of Centaline Property (Mainland China). Housing prices in first-tier cities are expected to rise, while prices in most third- and fourth-tier cities tend to be weak.

　　Supply-side reform points the way for real estate transformation

　　Since the real estate market entered an adjustment period last year, many industry insiders have publicly stated that the era of “making money lying down” is over and real estate has entered the silver age. Against this backdrop, major real estate companies have launched transformation plans.

　　Regarding the transformation of major real estate companies, Huang Wenzi admitted: “The real estate industry has reached a very important period today. The most important thing for everyone is to hold their ground and not transform blindly at this time. Slow is also a kind of development and progress, so slow-growth economy is also a development model; you can't say slow means no progress.”

　　In addition, Huang Wenzi bluntly stated, “Absolutely do not touch commercial real estate.” He said the results of doing commercial real estate are two extremes: either very good or very bad. If you enter the commercial real estate field without sufficient capability, “be careful not to hit your own head.”

　　The market has entered the silver age. Gu Yunchang said that intensified competition, accelerated reshuffling, and thinning profits are the three major characteristics of the silver age.

　　He believes that in the silver age, real estate companies must both transform and hold their ground. “Transformation is not changing industries; true transformation is supply-side reform.” Gu Yunchang said supply-side reform means producers should improve product quality, provide richer products, and enhance product efficiency. Therefore, supply-side structural reform points out a new direction for real estate companies.

　　The degree of differentiation in real estate is unexpected

　　The issue of reducing housing inventory also attracted widespread attention at the forum on the 29th.

　　Gu Yunchang said what was unexpected was the rapid pace of real estate development and the degree of differentiation in real estate exceeding expectations. “Shenzhen's housing prices rose by 40%, while housing prices in many small and medium-sized cities are falling. First-tier cities and third- and fourth-tier markets are completely different markets. Inventory in first-tier cities is not high, while inventory in third- and fourth-tier cities is high.”

　　Water treatment system anti-collision guardrail flooring flooring cement building materials gypsum board shale ceramsite emerging industry research Huang Wenzi stated that each enterprise has its own different directions, goals, and conditions. “We have two projects in Shanghai that we are not selling because sales this year have been good. Enterprises need to see whether their finances are at risk; safety is the most important. Starting a business to this day is not easy for everyone; don't go back to the pre-liberation days overnight. These are things we don't want to see.”

　　Huang Wenzi also pointed out that currently, second- and third-tier cities have relatively large real estate inventory, “basically selling at a loss,” while first-tier cities face the problem of high land costs. For example, he said land prices in first-tier cities have reached more than 30,000 yuan per square meter, and after development into housing, “you have to sell at 50,000 yuan per square meter to break even,” and “in first-tier cities, whether you do it or not is a problem.”

　　Cen Zhaoxiong said that land that needs to be bought still has to be bought. “Sometimes the market is not something we can control, so we do things in a balanced way: buy some expensive land and some cheap land.” As for how to make money, Cen Zhaoxiong said there is no special method, “just sell according to the rhythm.” But he revealed that Times Property had already completed its full-year sales target in November.