Since the TV series “Everything Is Fine” became popular, housing prices in Suzhou have been skyrocketing, especially in Suzhou Industrial Park. In just one quarter of 2019, the unit price has increased by nearly 4,000 yuan compared with the end of last year, and the average transaction price has reached 37,321 yuan/ square meter, which is 70% higher than the average price in Suzhou of 21,742 yuan/square meter. In terms of transaction volume, a total of 3,175 commercial housing units were sold in Suzhou last week, an increase of 47.13% from the previous week; of which 2,563 residential units were sold, an increase of 74.44% from the previous week.
Even the Suzhou government can no longer stand the situation of both volume and price rising. On the evening of the 11th of this month, the Suzhou government issued a new real estate policy: From now on, the sales of new houses in the entire Suzhou Industrial Park and some key areas of the Suzhou High-tech Zone will be restricted for three years; the sales of second-hand houses in the entire Suzhou Industrial Park will be restricted for five years.
The real estate market is undergoing drastic changes, and we are not just spectators. The real estate industry and the textile industry, which may seem unrelated, are inextricably linked.
Will the home textile market buck the trend and become more lively?
There seems to be some connection between the home textile market and the real estate market, but what is their correlation?
Among the reasons for replacing home textile products, 30% are due to moving to a new home, which is still a large proportion.
Compare the growth rate of commercial housing sales area and the revenue growth of listed home textile companies speed, it is obvious that there is a linear correlation. The revenue peak of home textiles closely follows the revenue peak of real estate, and there is a one-year lag period. This is also reasonable, after all, there is now about a year between purchasing a commercial house and getting it.
The two charts intuitively reflect the close relationship between home textiles and real estate. Due to the lag period in the relationship, we searched for the real estate sales in 2018. In April 2018 my country’s commercial housing bottomed out in May, and the cumulative growth rate of commercial housing area in May reached 2.9%. Judging from the situation in the past ten years, there is a certain cycle in real estate, and 2018 is exactly in the rising period of the cycle, which will have a positive impact on home textiles in the future. At present, we have learned from some home textile printing and dyeing factories that they have not been greatly affected by the market downturn in the recent stage, and home textile printing and dyeing are still in intensive production.
Not only is Suzhou’s real estate market going crazy, the sales area of commercial housing off-plan nationwide in the first quarter of this year increased by 3.2% year-on-year, paving the way for the explosion of the home textile market in the future.
Will rising housing prices exacerbate the problem of recruiting workers
The last time housing prices in Suzhou skyrocketed, it was not so long ago in 2016. In just six months, it rose by 50%, even There are countless properties that have doubled in size. In those two years, the number of foreign residents dropped significantly. The migrant population in 2014 was 3.934 million, in 2015 it was 3.944 million, in 2016 it dropped to 3.8654 million, and in 2017 it dropped to 3.71 million. There seems to be some connection with the rapid rise in housing prices.
In addition to the phenomenon of rising housing prices in parks and new areas, this phenomenon also exists in other areas of Suzhou. Especially after the introduction of restrictive policies, will investors’ funds be diverted to other districts, causing local housing prices to rise further?
Take Wujiang District as an example. The current house price increased by 11.11% month-on-month, reaching 16,325 yuan/square meter. In the foreseeable future, this rising trend seems to be difficult to suppress.
Last year Suzhou launched the “311” special rectification campaign to rectify fire hazards , rental houses and group rental houses are the key targets for rectification. Some landlords have taken advantage of this to significantly increase rents, further raising the cost of living for migrant workers. Nowadays, the sharp rise in housing prices will inevitably drive the rental market to continue to rise. For migrant workers, it is difficult to accept, but they have no choice but to leave for other cities or return to their hometowns, which is chosen by more and more migrant workers.
For the Wujiang area, which is an important textile industry town, the loss of foreign population is not good news. Many textile factories, printing and dyeing factories recruit people all year round, but even then they are never fully staffed. As housing prices continue to rise, the problem of finding workers difficult and expensive may become even more prominent.
The rise in housing prices is obviously a double-edged sword. While adding fuel to the flames of the textile market, it also pours water on it. While we are fully prepared to seize the hot home textile market in the real estate market, we must also speed up the pace of “machine replacement”. </p
