Government's role in real estate boom
By Xin Zhiming (Chinadaily.com.cn) Updated: 2014-10-28 17:00He is not the richest real estate tycoon in China, but among all the property big names, he has the most influence in the public opinion.
Ren Zhiqiang, chairman of Huayuan Property Co Ltd of Beijing, announced last week that he will retire next month, marking an end to his controversial career as a professional manager.
He led the little known Huayuan to become the first listed real estate company in the mainland in 1996 and a top market player at that time. Entering the new century, Huayuan’s expansion slowed, lagging far behind market leader China Vanke Co Ltd, but Ren shot to fame for his accurate market trend forecasts and continually hit the headlines for his controversial comments.
Ren has stirred up public uproar for his claims such as “we build homes for the rich” and “if you cannot afford a home (in the cities), you should not stay here”.
In a country where a large number of young people cannot afford their own apartment because of the rapid rise in home prices, Ren’s comments have made him one of the most hated public figures.
On the other hand, Ren had stubbornly forecast that the home prices would continue to rise, something that later proved to be in line with the realities but easily incurred resentment from those without a home.
What is ironic is that no matter how much he was hated, Ren has proved right in predicting the trend of China’s property price changes — at least until now. He had warned in early 2000s that China’s home prices will soar and people must buy as early as possible. At that time, it was more like a developer’s tactic to create panic among potential buyers than a rational market analysis, but it turned out that China’s home prices never stopped rising except a short-lived pullback during the 2008-2009 crisis period.
In 2012, when China’s home prices had been quite high after nearly 10 years of growth, he made a bold forecast by saying that they could rise strongly in 2013. Again, it turned out that he was right.
Ren’s friends said he was a man with good analysis ability, which helps him develop a clear consciousness of where the market was heading. Indeed, Ren has a fondness for data. He has a team studying the trend of the market and collect relevant data for him.
But many said being logical and rich in statistics are not enough for him to grasp the pulse of the market so accurately. It is well known that his father was a former senior official of the central government and some of his classmates are important policymakers.
