Chapter 2370

Su Xinghui said: "Actually, there are many factors currently driving up housing prices. For instance, most residents have an improvement-oriented demand for housing; for another, after the dual-track tax system, many local governments rely primarily on land sales for fiscal revenue; and furthermore, a massive amount of capital has flooded into the real estate industry, and they require profits. Therefore, housing prices are bound to skyrocket one day."

Indeed, there are many factors currently driving up housing prices. Among the nation's over one billion people, there are several hundred million urban residents, the vast majority of whom live in poor conditions; they all have a rigid demand for improving their housing conditions.

And the land-sale economy is an even more important reason for the rise in housing prices, a fact that Du Changfeng is naturally aware of as well.

In the current real estate industry, the influx of massive amounts of capital is giving this sector an increasingly heated trend.

The reason housing prices have been able to maintain their current state without skyrocketing is that the government led by Premier Nan has been striving to suppress them. In fact, it was precisely after Premier Nan's term expired that housing prices began their skyrocketing pace, like a mad bull whose reins could no longer be held.

Du Changfeng asked: "Secretary, then what must we do to control housing prices?"

Su Xinghui said: "It's very simple. To control housing prices, you must control land prices. The development of a city cannot rely entirely on a land-sale economy. Actually, to a certain extent, I also have to rely on a land-sale economy now—for example, using land to exchange for developers to build residential housing and help us construct office buildings. But regardless, one must have a clear head; one cannot rely entirely on land sales without other means of developing the economy."

Du Changfeng nodded repeatedly. Su Xinghui was absolutely right. Although he also used land to exchange for developers' capital investment to complete the city's infrastructure, his primary means remained attracting investment, developing the economy, and developing real industries. This was the fundamental basis of Chongjin County.

Currently, Chongjin County's fiscal revenue almost doubles every year, and this year it is even possible for it to double twice compared to last year. Most of this fiscal revenue comes from real industries; the proportion derived from actual land sales is not large. At the very least, compared to many other local governments, this proportion is quite small.

In fact, many local governments now treat land-sale revenue as their primary source of fiscal income. In some places, annual land-sale revenue accounts for over fifty percent of total fiscal revenue, and this proportion is still rising year by year.

This style of governance is called lazy governance. Developing other sectors of the economy is too tiring and requires worry, whereas land sales require no worry at all—the money arrives just by sitting there. These officials are naturally fond of such a comfortable way to make money, and this has also caused land prices to become increasingly high, with housing prices naturally following suit.

Ten-plus years from now, because land prices cannot be brought down, housing prices naturally won't be able to come down either. Yet the government will still introduce various measures to try to lower housing prices—isn't that a joke? In fact, the biggest cost of a house is the land-sale payment collected by the government. If the government is reluctant to give up this portion of revenue, then housing prices certainly cannot come down.

Even if government regulatory measures cause housing prices to drop by a few percentage points, perhaps after a few days, housing prices will see a retaliatory rebound, suddenly rising by ten-plus or even several dozen percentage points, leaving the common people in misery.

Later on, housing prices in those big cities will become unattainably high. An entire family's savings of several decades will only be enough to pay a down payment. If they want this house to belong entirely to themselves, they will have to be mortgage slaves for several decades. What kind of tragedy is this?