Only after looking at these two sets of data can you thoroughly understand the current real estate market policies.

Recently, two sets of data have attracted a lot of attention.

One is the total amount of household deposits, which reached a record high of 152 trillion at the end of 2024.

Corresponding to the total population of 1.408 billion, the average deposit per person reached 108,000 yuan.

I wonder if you've reached the average? But it can be seen that although the interest rate has been continuously decreasing, people still choose to save money frantically.

Interest rate changes in the past decade

Another set of data, which is also equivalent to saving money in a disguised form, is insurance, especially "life insurance" among them.

Official statistics show that in 2024, the premium income of the insurance industry was close to 5.7 trillion, with a double - digit year - on - year growth.

Among them, property insurance, such as auto insurance, had a year - on - year growth of 5.32%, which is a normal figure.

However, personal insurance increased by 13.2% year - on - year. The fastest - growing segment in personal insurance was "life insurance", with an increase of up to 15.45%, and the total amount has exceeded 3.1 trillion.

Now, most of us have a few friends selling insurance. You may have also consulted them, and the most recommended and actively traded insurance is life insurance, because many people use life insurance as a long - term savings tool - its interest rate can reach about 3%.

The result is: The low interest rates of bank deposit products have led to a significant increase in the business volume of insurance companies. Just for life insurance, in 2024, the transaction volume was more than 400 billion higher than the previous year, and nearly 800 billion higher than at the end of 2021.

This means that the effect of lowering interest rates to squeeze the "extra money" in people's hands into the consumer market has been discounted. People are still desperately looking for alternative savings and wealth - management products, and ultimately the insurance industry has caught the "dividend".

Source @ WeChat official account "13 Actuaries"

In 2024, the scale of the insurance industry grew rapidly, with the total assets increasing by 19.9% year - on - year, far outpacing banks, securities, and other financial institutions.

Looking back: In 2021, the growth rate of insurance premiums was still negative. Who would have thought that there would be a "V - shaped" reversal in just four years?

What major events happened in these four years? Presumably everyone can think of the answers right away: the years when people realized the importance of health and became more cautious about their lives, and the rapid decline of the real estate market.

From 2021 to 2024, the turnover of the national real estate market shrank by nearly half.

The impact of this is not only the collapse of real estate enterprises and the decline in their scale and profits, but more importantly, it has affected the flow of funds in the entire society.

Why do we say so? Let's first look at some capital data directly related to real estate:

Data source: National Bureau of Statistics, compiled by Future Habitat

In four years, the amount of money directly taken from deposits to buy houses decreased by more than 4 trillion, and the amount of personal loans for house purchases decreased by nearly 1.7 trillion.

In total, the amount of money flowing from personal accounts to the real estate market decreased by about 5.7 trillion.

Calculated based on the national average personal deposit of 73,000 yuan in 2021, it is equivalent to one out of every 26 people in the country delaying or canceling their house - buying plans.

Due to the decline in housing prices, which led to asset depreciation, and the shrinkage of the wealth of employees in companies related to the real estate industry chain, a large - scale "de - leveraging" among the public has also been triggered.

According to data compiled by Gelonghui, the new loans of Chinese residents from January to February this year hit a new low since 2015.

People are more willing to keep money in their hands rather than leveraging it into other assets or spending it. This behavior is a hedge against asset shrinkage and income decline.

Source: Gelonghui

More savings, less loans, and the shrinkage of asset prices will lead to a decline in the liquidity of funds and real estate in society. More money stays in accounts without being exchanged.

If the situation becomes more serious, deflation will occur.

At the same time, the decrease in residents' loans by trillions and the increase in personal assets in bank and insurance accounts by hundreds of trillions will lead to a misunderstanding by the authorities: people just don't want to spend money, not that they don't have money.

After all, from a numerical perspective, the private wealth is still growing positively.

Therefore, we can see a large number of policies aimed at squeezing out the deposits in banks. These include lowering deposit interest rates, directly "capping" the interest rates of savings - type insurance such as life insurance, and issuing coupons.

The policies for stabilizing the real estate market in the first stage also followed a similar logic, such as reducing down - payments, lowering interest rates, and reducing transaction fees.

The logic of these policies is to reduce the cost of buying a house so that homebuyers can psychologically hedge against the risk of asset depreciation. By lowering the threshold for home - buying, more home - buying demand is activated, making those who couldn't afford a house before start to consider it.

However, the incremental demand stimulated cannot offset the decline in the existing demand. So overall, the total transaction volume of the real estate market continues to decline.

Meanwhile, housing prices are also constantly falling and have returned to the level of 2016.

According to Wind data, at the beginning of this year, the prices of second - hand houses in Beijing have dropped by 28.5% compared with the peak, returning to the level of August 2016; in Shanghai, they have dropped by 30.2%, directly falling back to March 2016; in Guangzhou and Shenzhen, the drops are even more exaggerated, one by 29.7% and the other by 37.9%.

Here is a view: In the process of the real estate market decline, the most destructive factor is not the falling prices, but the locking up of the asset liquidity of houses.

Why do we say so?

Because if a house is regarded as a commodity, as long as it is being traded and in circulation, the associated debts related to the house may be transferred and digested. But if no one trades it, it only has residential value (use value) and appraised value (asset value).

However, when the market is in a downward trend, combined with the high leverage levels of real estate enterprises and homebuyers, it is difficult to appraise the value of a house at the market price. It can only be estimated that the market will continue to experience a sell - off, and the assets will be significantly discounted.

So in the markets of 2022 and 2023, a large number of troubled enterprises were seen selling their assets at prices as low as 40% of the original value.

This is inevitable. Assets with poor liquidity always have low valuations, such as factory buildings.

Ultimately, we will find a phenomenon: when the liquidity is locked up or drops rapidly and significantly, it will further intensify the decline of asset prices and may even trigger a sell - off.

In the past two years, there have been numerous second - hand houses that have been on the market for a year without being sold, and new houses that have only sold less than half of their units three years after the opening.

The most direct consequence of this situation is that real estate enterprises reduce their investments, and people reduce their consumption due to the decrease in their personal assets and save frantically to make up for the losses caused by the decline in asset prices.

At the same time, it means that a considerable proportion of the 10 - 15 trillion yuan of annual real estate development investment across the country has become ineffective investment, which has ultimately turned into corporate bad debts and is related to the bad debt risks of banks. (A considerable part of the land reserves of most troubled enterprises are such assets.)

In the second - hand housing market, buyers want to bargain hard, and sellers keep lowering their listing prices. However, only the lowest - priced houses in each community can be sold. To avoid being affected by the sell - off, sellers finally stop lowering prices, and both parties reach a deadlock. The liquidity of houses drops sharply, and trillions of yuan of assets cannot be cashed out, and thus cannot be converted into the down - payment for the next house or consumption ability.

The money that flowed into the real estate market during the incremental period has gradually become a backlog, like a dammed lake or a black hole.

Even if there is a demand for housing in the market, people are reluctant to invest money when seeing this situation to avoid being sucked into the black hole.

Therefore, a key factor for stabilizing the real estate market has become to stimulate the liquidity of houses.

Based on this goal, the second - stage intensified policies for the real estate market have started to be implemented in a targeted manner.

The first policy is about high - quality houses.

On the surface, high - quality houses represent an upgrade in living experience. But the direct effect it produces is that due to the huge generational gap in products, high - quality houses overwhelm old houses. Owners of existing properties are worried that their old houses will depreciate faster and will be forced to exchange their assets.

At the same time, the emergence of a large number of new products will also stimulate some potential buyers and make them regain their desire to buy.

As a result, a large amount of "improvement demand" has entered the new - housing market. Due to the "fire - sale" of existing properties by these owners, a large number of high - quality and low - priced houses have reappeared in the second - hand housing market, and the market turnover has rebounded.

This is a real supply - side reform.

The usable area ratio of some projects is as high as 140%

The second policy is the renovation of urban villages.

The role of "housing vouchers" needs no further explanation as it promotes the internal circulation. This time, the scale is further increased, with the plan to "continue to increase the renovation scale on the basis of the newly implemented 1 million units", and the purpose is obvious.

The third policy is that the government accelerates the purchase of houses.

The Two Sessions proposed to "promote the purchase of existing commercial housing and give cities greater autonomy in terms of the purchasing entity, price, and use."

Judging from the experience of various cities last year, both the unsold new houses in the hands of developers and the second - hand houses in the hands of individuals are within the scope of purchase. The government directly acts as a link in the circulation process.

In just the city of Guangzhou, for just one enterprise, Yuexiu Property, the revitalized existing assets reached tens of billions of yuan.

The fourth policy is to strictly control the incremental supply.

In the first quarter of this year, an abnormal phenomenon was observed. The land markets in key first - and second - tier cities across the country were extremely hot, with many high - premium plots emerging.

The direct reason for the emergence of land - kings is the concentrated supply of core plots in key first - and second - tier cities. High - quality houses in good cities and good locations are the most likely to preserve value in the future real estate market, and leading developers in this field must seize this market. The amount of newly added land reserves means the size of the market share.

Because after the capacity of the entire real estate market has decreased, two levels of concentration will increase:

One is the increasing concentration of leading real estate enterprises, and their market share and brand influence will be strengthened.

The other is the increasing market concentration of high - quality houses. "High - quality houses" have become the mainstream products, while "poor - quality houses" cannot be sold.

Therefore, behind the scramble for land is the scramble for products with sufficient liquidity in the future. At the same time, in an era where one project can determine success or failure, getting a single project with tens of billions or even hundreds of billions in sales will be a key factor in the competition for the leading position.

In essence, this is a competition for position among leading real estate enterprises and a fight for survival tickets among mid - and rear - ranked enterprises.

But for the market, the scramble for land has led to an increase in land prices, which indirectly supports both land prices and housing prices, creating a psychological expectation that "there is a bottom line for the decline of housing prices".

As a large number of high - quality houses in good locations enter the market, the market has begun to change. Wealthy people are exchanging their assets, and new buyers are entering the market. The turnover of the real estate market has gradually stabilized.

Once the turnover stabilizes or increases, prices will gradually emerge from the sell - off range, the liquidity of houses as assets will be restored, and confidence will start to return.

Overall, by purchasing and developing the rental market, the demand of the rigid - demand segment is addressed to avoid a sell - off of rigid - demand housing in the market. For the improvement market, high - quality houses in good locations are used to change the supply structure, promote asset exchange, and stimulate new demand to enter the market in advance. At the same time, price limits are removed to let the market play a leading role. The entire market has begun to be gradually revitalized.

After the introduction of this series of combined policies, we will find that recently, there has been a rare low - frequency period for the introduction of new real estate policies, which is different from the large number of new policies issued last year and the year before. This also shows from the side that the current policies are effective.

The recently introduced new residential standards and