Since the implementation of the first housing reform in mainland China in 1998, domestic housing prices have shown a rapid upward trend until the first half of 2021. The national average house price has also risen from 2,000 yuan/square meter in the past to 11,000 yuan/square meter at the peak, a full increase of 5.5 times. In particular, the housing price in first-tier cities has risen from 3,000 yuan/square meter to 6-70,000 yuan/square meter at the highest, and the housing price has increased by at least 20-30 times. Families who invested in a few homes earlier have now achieved financial freedom and become big winners in life.
However, since the second half of 2021, there has been a clear trend of adjustment in the domestic real estate market. Especially after entering March 2023, the trend of real estate market adjustment is more obvious. From January to November this year, the sales area of commercial housing nationwide was about 1.212 billion square meters, down 23.3 percent year-on-year, and the sales of commercial housing were about 11.86 trillion yuan, down 26.6 percent year-on-year.
At the same time, in November, the average price of second-hand housing in Baicheng was 15,400 yuan / square meter, down 0.56% month-on-month, which has fallen month-on-month for 19 consecutive months, and the year-on-year decline expanded to 3.21%. Housing prices in large and medium-sized cities across the country are in a general downward trend.
In the face of the current trend of the real estate market, many people will ask, from next year, should we "buy a house" or "sell a house"? In this regard, the bulls believe that the domestic real estate market has been adjusted for two years, coupled with the frequent favorable policies, housing prices will rise in retaliation next year. Therefore, buying a house next year can be copied to the bottom of the property market. However, there are also bearish people who believe that domestic housing prices are too high, which has been far away from the income of local people, and will gradually return to residential properties in the next few years. Now it is the wisest choice to "sell the house" at a high price for cash.
In view of whether to "buy a house" or "sell a house" in the future? Internet celebrity entrepreneur Cao Dewang has issued advice on many public occasions: If you have a surplus house in your hand, you should sell it as soon as possible, and it is dangerous to wait. Otherwise, you will fall into the dilemma of not being able to rent out and not being able to sell. In Cao Dewang's view: real estate is not a suitable investment, if you choose to invest in the real estate market now, the income and investment are not proportional. And the current real estate market is bad, choosing to enter the real estate market at this time is undoubtedly a moth to the fire.
We also agree with Cao Dewang's advice. The main reasons are as follows: First, there is a surplus of domestic real estate. According to the latest data released by the Ministry of Housing and Urban-Rural Development, there are 600 million houses in the mainland. If 5 people live in each house, it can accommodate 3 billion people. Of course, these 600 million houses also include houses with small property rights, resettlement houses, and buildings built in rural areas.
But even so, there is a serious surplus of houses in the country. In addition, the data shows that 96% of domestic households have 1 commercial house, and 41.5% of families have more than 2 commercial houses. In the future, the number of households in need will be smaller and smaller. And in the case of a surplus of real estate, it is not too realistic to expect a sharp rise in house prices next year.
Second, residents' incomes do not support the rise in housing prices. After three years of the epidemic, many people have reduced their income or lost their jobs, and their ability to buy houses has been seriously weakened, which can no longer support the current high housing prices. In fact, it costs at least 1.5 million to 2 million yuan to buy a 90-square-meter commercial house in second- and third-tier cities, which is equivalent to the income of local residents for more than 20 years.
In first-tier cities, it costs at least 6 million to buy a 90-square-meter commercial house, which is equivalent to a family's income for 50-60 years. In addition, after the epidemic, more and more people are more rational to buy houses, and they will decide whether to buy a house according to their financial strength, and will no longer buy a house as desperately and impulsively as in the past.
Third, the real estate regulation policy for many years has begun to ferment. Since 2016, the mainland has introduced real estate control policies, especially in first-tier cities, with greater intensity and stricter implementation, with the aim of curbing the rapid rise of housing prices and achieving "housing for living, not speculation". In 2021 alone, as many as 650 real estate control policies were introduced in China.
The effect of years of real estate regulation is currently continuing to ferment, which will lead to a large number of investors and speculators withdrawing from the property market, and the improvement of the home buying group is in a wait-and-see state. Obviously, it is no longer realistic to expect house prices to rise sharply again next year. People who have multiple properties should sell their homes as soon as possible to cash in while they still have time.