On December 30, economist Yi Xianrong's remarks caused a lot of waves in the real estate market. In an exclusive interview with the reporter of "Daily Economic News", he clearly pointed out that the adjustment period of the real estate market will last at least 6 to 10 years. The main reason behind this assertion is a profound shift in market expectations. In the past, the real estate market continued to boom and house prices continued to rise, attracting a large influx of investors. But now, buying a house is no longer a surefire investment, but comes with huge risks. In particular, those who hold a large amount of property through highly leveraged means are likely to face significant financial losses in the future.
1. The history and current situation of the real estate market
We must first understand the historical evolution of the real estate market. Over the past few decades, the real estate market has experienced a period of rapid growth, with house prices generally rising, attracting a large number of investors to the market. This trend is partly due to accelerated urbanization and partly due to limited access to investment, making real estate a relatively safe way to invest.
However, the current situation in the real estate market has changed radically. With the continuous strengthening of the state's regulatory policies on the real estate market, the trend of rising housing prices has been curbed. At the same time, the mindset of home buyers is changing, and many are becoming cautious about buying a home, fearing that they will become a high-risk investment pick-up.
2. Changes in market expectations
The change in expectations is an important factor affecting the real estate market. In the past, the market expected house prices to go up, not down, but this expectation is now being broken. With the strengthening of regulatory policies and the change in the mentality of home buyers, market expectations have changed fundamentally.
The impact of this change in expectations on the market is far-reaching. It has led to a decrease in home-buying behavior and a slowdown in real estate sales. At the same time, it also puts developers under more pressure to sell and have to adopt more flexible pricing strategies.
3. The risk of holding real estate with high leverage
In an interview, Yi Xianrong specifically mentioned the risk of holding a large number of properties by increasing leverage. In past house price growth cycles, some investors have bought multiple properties with high leverage, hoping to realize a return through rental income and rising house prices. However, in the current market environment, the risks of this investment strategy are infinitely magnified.
On the one hand, as the upward trend in house prices slows, the room for property appreciation is limited, and on the other hand, rental income often does not cover the interest on the loan, resulting in significant financial pressure for investors. Once house prices fall or loan rates rise, these investors will be exposed to significant financial risk.
Fourth, future prospects and suggestions
For the future real estate market, Yi Xianrong believes that the adjustment period will last for 6 to 10 years. During this period, the market will gradually return to rationality, and house prices will stabilize. For investors, they should be cautious about real estate investment and avoid blindly following the herd. For home buyers, rational decisions should be made based on their own economic strength and housing needs.
The government and relevant departments should also continue to strengthen the regulation and management of the real estate market to ensure the stable and healthy development of the market. For example, the stability and healthy development of the market can be promoted by formulating reasonable land supply policies, strengthening housing security, and promoting real estate tax pilots.
To sum up, the adjustment period of the real estate market will last from 6 to 10 years. During this period, the market will face many challenges and opportunities. For investors and home buyers, they should maintain a rational and cautious attitude and make decisions based on their actual situation. At the same time, the government and relevant departments should also strengthen regulation and management to promote the stable and healthy development of the market.