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After entering 2023, the downturn in the real estate market caught people off guard. In previous years, real estate was just going downhill, but this time it's rolling down the slope. Delayed ends, thunderstorms in housing enterprises, and negative news have eroded the people's remaining confidence in real estate. In any case, real estate is an important pillar of economic development in many cities, so the government is bound to introduce various policies to save real estate. Unfortunately, these policies have had a limited effect, either lasting for a while and then muting the fire, or simply sinking into the ocean. And this time, some people see a new "rescuer" and think that it can knock down house prices and stimulate the demand for housing, but in my opinion, this time it will fail again.
01|Who is the "rescuer" this time? In the eyes of most people, the most effective way to stimulate the purchase of houses is to fall in house prices, and it is a sharp decline, if this can be achieved, the demand for housing will inevitably increase rapidly. Therefore, the government has recently introduced a series of measures aimed at stimulating the market by regulating housing prices. However, I am cautious about this approach.
02|First of all, a sharp fall in house prices may cause market panic and trigger a chain reaction. Although falling house prices will attract some buyers, it will also make more people worry about the depreciation of their properties and wait and see. As a result, the market supply and demand are out of balance, and the real estate market is in a more chaotic state.
03|Second, falling house prices are a blow to those who have already bought a house. Their assets depreciate and they may face heavy debt. This will undoubtedly exacerbate social instability and put more pressure on the economy.
04|Moreover, falling house prices do not solve the fundamental problems of the real estate market. In the past few years, the overheated development of the real estate market has led to the creation of bubbles, inflated house prices, and huge pressure to buy a house. If the demand for housing is stimulated only through the fall in house prices, without solving the contradiction between supply and demand and structural problems, then this stimulus is only temporary, and the market will soon return to the original predicament.
In summary, although falling house prices may stimulate demand for homes in the short term, this approach is not a long-term solution. The government needs to take a more macro perspective, reform the real estate market system and improve relevant policies, in order to truly solve the problems of the real estate market and achieve sustainable development. Otherwise, this "rescue" can only be a defeated battle.