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Plough in the Era of Products

CCRE had its 15th birthday recently. China's real estate industry has also passed about 15 years since its birth in early 90's last century. By age, CCRE was born and grow with China's real estate industry.

In recent years, the introspection on "living changes China" has shown that China's real estate industry has started self-examination and summarization. People gradually realize that: in the last decade, the living revolution in Chinese cities has dramatically changed many in our life and brain, including the idea of wealth and consumption structure, living mode and culture, citizen accommodation and urbanization. It has profound and far-reaching influence in many aspects of our life.

Retrospectively, we can identify the following two stages that commodity residence, as the products of real estate developers, has experienced.

The first stage is the industry birth in early 90's to the formal end of the housing allotment system in 1998. During this period, the industry had just begun. Despite the temporary revival of the housing allotment system, the commercial force toward market residence had already shown its determination and power of domination. Regrettably, the fledgling period of the industry coincided with a national financial policy tightening. The five year "macro control" hindered the advance forward, and directly threatened all developers in the industry. In this stage, developers and consumers were only presenting primitive requirements for residence products. The duty of products was merely to replace the "match box" under allotment system which had lasted for over 40 years. Room design, architecture style, environment greening, property management are fashionable concepts in those years. To some extent, such terms also dictate positioning, image and sales results of products in the market.

The second stage is from 1998 to date. China's real estate industry rose from adversity, undertaking and digesting the enormous energy from the ending of housing allotment system. A real estate storm swept almost every mid and big city in China. In this stage, the government set real estate as the pillar of national economy in order to stimulate consumption, backed by financial policy which encourages people to buy house on loan. Huge demand stimulated the rapid expansion of the industry. By the end of 2006, real estate industry scale reached RMB2 trillion, almost one tenth of the entire national economy volume. Amid the rapid development, market competition was also intensifying, while consumption concepts were evolving toward maturity and rationality. In this background, developers are delivering flows of products to the market based on integrated globally leading designing resources. Architecture style varies from European classic to minimalism, from Chinese traditional style to evolved modern style, from North America, North Europe to Spain, Mediterranean Sea… in the galaxy of China's commodity residence, you may see any architecture style from the world. Room design is innovated at unrelenting pace. Larger developers can offer thousands of room designs from their database at any given time. Scenery building is also reaching new peaks. Hundreds of international scenery designers, now based in China, are taking their Chinese products as the landmarks of their career for the decade. Property management has never been lagged. With the introduction of ISO9000 and ISO14000, the top-tier property managers around the world including CB Richard Ellis and Jones Lang LaSalle from Britain, DTZ and Savills from Hong Kong, have their edges in China and are undertaking high-end properties in rows. In this stage, China's real estate industry stepped into a full blooming era of products.

Ploughing in the era of products, we are happy, industrious, self motivated and never satisfied, but in the mean time painful, regretting and always feel sorry. The source of happiness is the continued support and favour from the market for City Garden, Osmanthus Garden, Forest Peninsula, U-Town and Landmark since Jinshui Garden, the first high-end community in Zhengzhou, was completed ten years ago. Pain, regret and sorry we felt came from the inadequate professional capacity, resource integrating capacity and overall management in the process of delivery. There are places in our design, room layout, structure, auxiliaries, scenery and management where improvements need to be made. Luckily, our customers treat us with tolerance, understanding and magnanimity. They gave us so much containment, recognition and support. So when I and my co-workers presented our products in front of our customers and readers after months of work, we were like a not-good-enough student with bumping heart to hand over homework to teacher, self checking, reflecting and hoping for the best.

To our relief and as what is expected, after 15 years of fast growth, the third stage of China's real estate development led by "residence industrialization" is coming. Residence industrialization was realized long ago in Japan, US and Europe. It draws an ideal blueprint for China's future residence market, which means standard design, numerical construction, industrialization, systematic auxiliaries, socialized and mass production. It is expected that residence industrialization is going to trigger another revolution to China's real estate industry. In about five years, major components of the new batch of residence products will be rolled out from production lines, with accuracy measured by millimetre or micrometer. Quality problem and long construction cycle harassed us so long would become history. A real estate market connecting international standards will take shape in ten years.

Our customers, my colleagues and I are all expecting the day. 2007-7-14
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