Does the cooling of the property market have a profound impact on furniture companies?

Since April this year, the State Council and the Ministry of Housing issued a series of New Deal real estate, localities have also gradually introduced the relevant regulatory rules, to cool the property market caused a person's furniture industry concerns, once the real estate malaise or even collapse, the furniture industry will probably suffer the common lot The tragic ending.

     According to the analysis of relevant persons in the industry, the development of the furniture industry in recent years has relied on the promotion of the property market heating. The furniture market demand is closely related to the development of the real estate market, but the purpose of policy regulation is to " squeeze bubbles " rather than " freeze demand. " The rigid demand for housing still exists. With the development of urbanization, the expansion of the demand for furniture and consumption upgrades of the newly added urban population will further promote the growth of the demand for China's furniture industry.

     Point one: the furniture industry by cooling the property market "implicated"

     With the frequent “ combination punches ” in macro-control of the real estate market, the housing transaction volume in the first-tier cities has shown a full decline recently, and the shrinking transaction volume is spreading to the second-tier cities. According to the data of housing transactions in key cities, by the beginning of May , the area of ​​new housing transactions in China ’s first-tier cities fell by 35% year-on-year, and the national average area of ​​new housing transactions fell by 6% year-on-year.

The shrinking transaction volume in the property market and the loosening of housing prices have shown that the effect of real estate regulation and control “ combination boxing ” is gradually appearing, but it has also caused concerns about the real estate-related furniture and home textile industries. Even relevant people believe that once the real estate industry appears sluggish, furniture demand may be inhibited, and industry development may enter a downward spiral.

Ding Zuohong, chairman of Yuexing Group, said that when the pressure on the property market policy is unprecedented, the lightness of upstream real estate sales will directly affect the downstream furniture and building materials decoration industry. Ding Zuohong believes that there will be a lag of 2-3 months for the segmented home furnishing industry including the furniture industry, home textile industry, food and beverage supplies industry, decoration industry, and decoration industry. The current Chinese home furnishing chain store industry has a systemic risk of surplus store area and vicious competition upgrading. In front of this time the property market regulation, the more aggressive home furnishing stores in the early stage may be under greater pressure in terms of cash flow and profit contribution.

    Opinion 2: Rigid demand is strong and the furniture market has a bright future

Rigid demand for cooling property market is still strong

The furniture industry has always been closely related to the real estate industry. The recent intensive introduction of the new real estate policy has indeed had an impact on the property market transactions, causing people to worry about the demand for furniture. But we also need to clarify that the state ’s property market policy is aimed at “ restraining the rapid rise in housing prices in some cities and effectively solving the housing problem of urban residents ” , rather than fundamentally suppressing the development of real estate. “ Squeezing bubbles ” does not mean “ freezing ” " Demand " , people's rigid demand for housing still exists.

With the continuous increase of per capita consumption expenditure, the continuous adjustment of consumption habits and the continuous change of consumption patterns brought about by the continuous growth of the national economy, furniture products are quietly changing from ordinary consumer product forms to home living cultural elements. The reversed consumption trend will further promote the growth of demand for furniture products in China.

     According to Jia Qingwen, president of the China Furniture Industry Association, the total output value of furniture enterprises above designated size in 2009 was close to 270 billion yuan, an increase of 11.4% year-on-year, accounting for 40% of the total industry share. "The total output value of the whole industry reached 650 billion last year, and it is estimated that this year it will expand to more than 700 billion. " For the outlook of the home furnishing industry in 2010 , Jia Qingwen believes that it is expected to continue to grow at a rate of 12% -15% . He believes that China's current urbanization is only 45% , and it will take 20 years to reach 60% . During these 20 years, a large number of rural people will enter the city, and their demand for furniture products will continue to increase substantially. At the same time, as residents' living standards improve and furniture products continue to innovate, people will replace new furniture with shorter and shorter cycles. Therefore, not only in 2010 , the future of the furniture market is very broad in the next 20 years.

   Traditional wedding consumption and hotel expansion support the furniture demand market

     While the demand for furniture and consumption upgrades in the newly-increased urban population in China have driven the increase in demand for furniture products, traditional wedding consumption and the expansion of new hotels have provided huge demand for the furniture market.

     Our custom has always been the pursuit of happy, buying new furniture has become the new wedding customs, China is entering a peak period of 80 years of marriage "baby boomers" born population. Throughout the 1980s , the average annual new-born population was more than 20 million. These people grew up in a time when the material life was relatively abundant. They have a strong sense of individual consumption, and pay more attention to and pursuit of the home environment. They are willing to spend on decorating new homes. According to relevant information from the Ministry of Civil Affairs of China, the number of registered marriages in China reached 11.458 million in 2009 , 1.4 times that in 2005 . It can be seen that the huge wedding demand has become an important support for the optimistic furniture consumption prospects.

     At the same time, in recent years, with the prosperous development of the tourism industry, the number of hotels has directly increased, and the expansion of the hotel industry has also increased the demand for the hotel supplies market, thereby providing a broad demand space for hotel furniture supplies. According to statistics, there are currently 16,000 star-rated hotels in China, including 463 five-star hotels and 2,000 four-star hotels. The total reception facilities of various hotels and guesthouses in China are about 300,000 . Relevant experts predict that by 2015 China's high-star hotels will double, and the entire hotel industry will add 200,000 hotels and other reception facilities. The construction of the hotel industry that has entered the stage of rapid development will become another strong support for the growth of the furniture market demand.

     In addition, the continuous growth of China's middle- and high-income people, the increasing demand for children's products, the further improvement of the social security system, and the continuous improvement of residential housing conditions will also jointly promote the continued expansion of China's furniture market demand. This shows that China's furniture market development space is still broad.

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