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  • Home > News > Industrial news >

    Experts predict how the property market will affect the furniture industry

    Experts predict how the property market will affect the furniture industry
    2023/5/2 0:00:00

    Since April 2010, the State Council and the Ministry of Housing and Urban-Rural Development have issued a series of new real estate policies, and various localities have also successively issued relevant regulations. The cooling of the property market has aroused the concern of people in the furniture industry. Once the real estate industry slumps or even collapses, the furniture industry may suffer. The tragic end of the lips and teeth.

    Analysts in the industry believe that the development of the furniture industry in recent years has been driven by the heating up of the property market. The furniture market demand is closely related to the development of the real estate market. However, the purpose of policy regulation is to "squeeze bubbles" rather than "freeze demand". People's rigid demand for housing still exists. With the development of urbanization, the expansion of demand for furniture and the upgrading of consumption by the new urban population will further promote the growth of demand for my country's furniture industry.

    Viewpoint 1: The property market is cooling down and the furniture industry is "implicated"

    With the frequent "combination punches" of macro-control in the real estate market, the housing transaction volume in first-tier cities has recently shown a comprehensive decline, and the shrinking transaction volume is spreading to second-tier cities. According to data on housing transactions in key cities, as of early May, the area of new housing transactions in my country's first-tier cities has dropped by 35% year-on-year, and the national average new housing transaction area has dropped by 6% year-on-year.

    The shrinking transaction volume of the real estate market and the loosening of housing prices both show that the effect of the "combined fist" of real estate regulation is gradually showing, but it has also aroused concerns about the real estate-related furniture and home textile industries. Even relevant people believe that once the real estate industry is sluggish, the demand for furniture may be suppressed, and the development of the industry may enter a downward path.

    Ding Zuohong, chairman of Yuexing Group, said that the current property market policy is unprecedentedly suppressed, and the sluggish sales of upstream real estate will directly affect the downstream furniture, building materials and decoration industry. Ding Zuohong believes that there will be a lag period of 2-3 months in the subdivided home furnishing industry, including the furniture industry, home textile industry, catering and kitchen supplies industry, decoration industry, and decoration industry. In the current Chinese home furnishing chain store industry, there are systemic risks of excess store area and escalating vicious competition. In the face of this property market regulation, the more aggressive home furnishing stores in the early stage may be under greater pressure in cash flow and profit contribution.

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

    Rigid demand is still strong as the property market cools down

    The furniture industry has always been closely related to the real estate industry. The recent intensive introduction of new real estate policies has indeed had an impact on real estate transactions, and it is understandable to cause people to worry about furniture demand. But we also need to make it clear that the purpose of the country’s property market policy is to “curb the excessive rise of housing prices in some cities and effectively solve the housing problems of urban residents”, rather than fundamentally suppressing the development of real estate. “Squeezing bubbles” does not mean “freezing housing prices.” demand”, people’s rigid demand for housing still exists.

    With the continuous increase of per capita consumption expenditure brought about by the continuous growth of the national economy, the continuous adjustment of consumption habits, and the continuous transformation of consumption patterns, furniture products are quietly changing from ordinary consumer products to household life cultural elements. The reversed consumption trend will further promote the demand growth of my country's furniture products.

    According to Jia Qingwen, president of the China Furniture Industry Association, the total output value of furniture enterprises above designated size was close to 270 billion in 2009, 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 maintain a growth rate of 12%-15%. He believes that China's urbanization is currently only 45%, and it will take 20 years to reach 60%. In the past 20 years, a large number of rural population will move to the city, and their demand for furniture products will continue to increase significantly. At the same time, as residents' living standards improve and furniture products continue to innovate, the cycle for people to replace new furniture will become shorter and shorter. Therefore, not only in 2010, but also in the next 20 years, the prospects of the furniture market are very broad.

    Traditional wedding consumption and hotel expansion support the demand for furniture market

    While China's urbanization has increased the urban population's demand for furniture and consumption upgrades, the demand for furniture products has grown. At the same time, traditional wedding consumption and trendy hotel expansion have provided huge demand for the furniture market.

    Our country has always had the custom of pursuing festive celebrations. It has become a wedding custom for new couples to buy new furniture. At present, our country is entering the wedding peak period of the "baby boom" born in the 1980s. Throughout the 1980s, the average annual newborn population exceeded 20 million. These people grew up in an era of relatively affluent material life. They have a strong sense of individual consumption, pay more attention to and pursue the home environment, and are willing to spend on decorating new homes. According to relevant data from the Ministry of Civil Affairs of my country, the number of registered marriages in my country reached 11.458 million in 2009, 1.4 times that of 2005. It can be seen that the huge demand for wedding celebrations has become an important support for the optimistic outlook of furniture consumption.

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

    In addition, factors such as the continuous growth of middle and high-income groups in my country, the increasing demand for children's products, the further improvement of the social security system, and the continuous improvement of residents' housing conditions will jointly promote the continued expansion of my country's furniture market demand. It can be seen that the development space of my country's furniture market is still broad.


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    Marketing Centre:  North of Xinxi 3rd, Lunjiao Town, Shunde , Foshan, Guangdong , China

     

       



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