Characteristics of real estate finance
focus one's attention on
Real estate is a commodity, not only in area and volume, but also in value. Compared with most commodities, the value of real estate is greater. Generally speaking, a house ranges from hundreds of thousands to hundreds of thousands to tens of millions or even hundreds of millions of yuan. Therefore, whether in the production or circulation of real estate commodities, there must be huge capital investment. Therefore, in real estate financial activities, real estate development loans, real estate circulation loans or real estate consumption loans must have the participation of financial institutions and a stable and abundant source of credit funds. In foreign countries, the financing of real estate funds is usually carried out by specialized financial institutions (such as the Federal Housing Savings Bank of the United States, the Housing Bank of Brazil and the Housing Finance Corporation of Japan).
(B) the capital turnover cycle is long
Real estate development and construction needs to go through a series of complicated and time-consuming processes, such as land acquisition and development, completion of "three links and one leveling" or "seven links and one leveling", and then construction, (decoration) and completion acceptance. Compared with the production cycle of other commodities, real estate development takes longer, ranging from one year to two years to several years. In the field of circulation, because of its huge value, buyers are often unable to pay off the house price in one lump sum, and often buy houses by installment; If the invested funds are recovered by means of house leasing, the capital recovery cycle will be longer. Therefore, the use of real estate funds from input to output, fast for several years, slow for more than ten years, or even decades before it can be fully recovered.
(C) the flow of fixed funds
House and land are connected and inseparable in material form. Because the land can't move, real estate is fixed in a certain place and can't move, which is usually called real estate. In exchange, it can neither move its spatial position nor exist logistics, and its circulation is only the change of ownership relationship. Therefore, the production, circulation and consumption of real estate commodities are all completed in the same geographical position in turn. This determines that the investment, form conversion and compensation of real estate funds are carried out in the same fixed position in order.
capital appreciation
On the one hand, real estate funds can bring benefits, that is, interest, which is a manifestation of the appreciation of real estate funds. The appreciation of real estate funds is the result of social reproduction and the labor creation of material producers. In the process of social reproduction, through the change of capital form, the amount of money at the final point is greater than that at the starting point, which is the value-added brought by the capital movement. In the process of real estate reproduction, if funds keep flowing, the value will increase again and again. On the other hand, land is a non-renewable resource and a basic element of human production and life. With the continuous development of social economy, the demand for real estate will increase day by day, making real estate more and more scarce and real estate prices will continue to rise. Therefore, financial institutions are willing to invest in real estate or engage in real estate credit activities to preserve and increase the value of their monetary assets.
(5) Risk
In real estate financial activities, due to unpredictable or predictable but inevitable factors, the expected real estate income may deviate from the actual real estate financial income, thus there is the risk of capital loss. The financing of real estate funds is mostly medium and long-term financing, and the period from capital investment to recovery is generally long. In this input-output process, if financing is difficult to recover, real estate financial risks will arise. This risk mainly comes from the following four aspects: policy risk, decision risk, natural risk and financial risk. For example, policy changes may lead to different situations in the real estate market and financial market than expected when making investment decisions, or due to mistakes in investment decisions, the expected investment income cannot be realized, resulting in the failure to fully recover the funds for real estate financing; Another example is the occurrence of various sudden natural disasters (earthquakes, floods, fires, etc.). ), resulting in serious damage or even non-existence of real estate projects, and it is difficult to recover real estate funds; In addition, in real estate financial activities, due to various reasons, the debtor can't repay the principal and interest of the loan, or the securities issuer can't repay the principal and interest at maturity, and financial risks of real estate finance will also occur.
The role of real estate finance
Real estate finance plays an increasingly prominent role in the national economy and people's daily life. Real estate financial behavior directly affects the effectiveness of individual housing, real estate enterprise management and economic market. The large amount of funds needed by the real estate industry and the "financial leverage principle" of real estate development and application determine that real estate funds cannot rely solely on developers' own funds, but must rely on financial instruments for financing.
(1) Providing financial guarantee for real estate development and operation.
First of all, the process of real estate development and management generally goes through four main stages: land acquisition, real estate development and construction, real estate sales and real estate management. These four stages are closely linked, and capital has become the key factor linking all links. In addition, the production cycle of real estate is long, capital demand is intensive, and there is a time difference between capital supply and demand. Solving this time difference requires financial support. The proportion of real estate finance in the total financial volume in China is getting higher and higher. At the end of 2005, real estate loans reached 3.07 trillion yuan, accounting for 14.84% of the RMB loan balance of financial institutions and 16.75% of GDP. The balance of commercial personal housing loans was 1.84 trillion yuan, accounting for 8.9% of the balance of RMB loans of financial institutions. The proportion of GDP is 10%. The health and stability of real estate finance is very important to the health and stability of real estate system.
Secondly, from the perspective of the development of the financial industry, real estate is of great significance to the operation of the financial industry, including business expansion and profit generation. As a kind of real estate, real estate has the characteristics of maintaining and increasing value, which makes real estate an ideal collateral for the financial industry.
Thirdly, from the internal function of the financial market, the functions of capital accumulation, allocation and macro-control have promoted the development of the real estate industry.
The capital accumulation function of finance plays the role of "reservoir" of funds. It concentrates the relatively scattered funds temporarily idle by some departments and some economic units in a certain period of time to meet the large-scale investment demand. In particular, it provides large investment for enterprise development and provides a source of funds for large-scale infrastructure construction and public expenditure of government departments. In the financial market, fund demanders can easily obtain funds through direct or indirect financing, and fund providers can choose liquidity demand investment suitable for their own income and risk preference through various forms of financial instruments, so as to maximize the benefit of funds.
Financial market transfers resources from inefficient departments to efficient departments, so that a society's economic resources can be most effectively allocated to the most efficient or effective use, and the rational allocation and effective utilization of scarce resources can be realized. According to different risk preferences, people with higher risk aversion use various financial instruments to transfer risks to people with lower risk aversion, thus realizing risk redistribution.
The existence and development of financial markets have created conditions for the government to implement macro-control. The legal deposit reserve, discount rate and open market business are all based on the financial market. Financial market not only provides information for the implementation of monetary policy, but also provides decision-making basis for government departments to collect and analyze economic operation and formulate policies.
In developed financial markets, real estate finance plays the role of credit and financing, supplements the capital demand in the process of reproduction, and ensures a virtuous circle of investment and output of real estate development and operation funds.