“Although the downward trend in housing prices has already taken shape, in light of new urbanization there is still a long way to go, and the real estate industry has not yet reached an inflection point.” Wang Yongbin, vice president of the China Real Estate Research Association, said in an interview with reporters. In his view, by riding the train of new urbanization, real estate enterprises will still have many opportunities.

The only thing is that real estate enterprises need to make good use of the current adjustment period and improve their internal strengths.

Reporter: When it comes to new urbanization, where do you think the focus of future urban development lies?

Wang Yongbin: I believe the focus of future urban development is to solve the problem of integrating people and industry. At present, industries in the eastern region are gradually shifting to the central and western regions, and the population is correspondingly shifting along with industry. Because of the outflow of labor, labor costs in the eastern region are constantly rising, which to some extent forces them to continuously upgrade their industries. Under such circumstances, only by giving priority to developing the tertiary sector can more jobs be provided.

Reporter: What requirements does urbanization place on the real estate industry?

Wang Yongbin: In the process of new urbanization, real estate enterprises must recognize that profound changes are taking place. Nowadays people have higher requirements for urban quality and living environments. Every real estate development enterprise must view the projects it is currently operating within the context of the entire city and establish project positioning from the height of the city's overall functions.

In addition, small and medium-sized cities are the focus and difficulty of future urbanization. China has a large number of rural areas, and the radiating capacity of large cities is limited. Driving rural development requires small and medium-sized cities and towns, but the leading industry positioning of small and medium-sized cities is often not clear enough, planning levels are relatively low, various talents and resources are relatively lacking, and urban management levels are relatively backward. These are realities that real estate enterprises must face.

Reporter: Among the 70 large and medium-sized cities in May, more than half saw declines in new commercial residential prices. What is your view?

Wang Yongbin: Housing prices in many cities are in a consolidation stage, and in some cities the downward trend has already taken shape. For first-tier cities like Beijing, I am still fairly confident; a deep adjustment is unlikely. In most second-tier cities, the development factors have not changed, large infrastructure investment is still being strengthened, and the population is still growing slowly, so housing prices may not change much, though small adjustments are possible. The real difficulties lie in third- and fourth-tier cities with particularly large development volumes, especially those with irrational industrial structures, industries lacking distinctive features and competitiveness, and those far from high-speed rail and expressways. The market downturn in these cities will last a long time, and there may even be unfinished projects.

Reporter: What transformation requirements do real estate enterprises face?

Wang Yongbin: Many of today's rigid-demand buyers are customers seeking to improve their housing conditions. People have put forward higher-quality requirements for improvement housing, including living environment, supporting facilities, architectural styling, property management, and so on. Real estate enterprises must study in depth the demand characteristics of housing residents, because these rational consumers will no longer pay for concepts. Future urban development will gradually shift from being GDP-centered to becoming livable cities with beautiful environments and social harmony. As cities transform and develop, real estate enterprises must also transform and upgrade. Real estate enterprises must gain a deep understanding of urban planning, social needs, and changes in people's lifestyles; these are the key to the sustainable development of real estate enterprises. You should know that along with urban development, people need not only a “city” but also a “market.” If developers focus only on building the city in the early stage and cannot promote the formation of the “market,” such enterprises have no future.

Reporter: During the market adjustment period, how should real estate enterprises respond?

Wang Yongbin: The real estate industry can now use the current adjustment period to properly improve its internal strengths. Do a good job on products and enhance competitiveness.