In the next 10 years, will the house be a "wealth" or a "burden"?

From the perspective of 2023, the answer is undoubtedly: Yes! Even though housing prices have fluctuated in recent years, by the end of 2023, the national average housing price is still as high as 9,660 yuan per square meter, easily entering the 10,000 yuan mark. This means that the starting price of a house is nearly one million yuan, which makes people recall the era of "getting rich overnight".

For families who have already purchased a home, the house is undoubtedly an important cornerstone of their wealth. And, as time went on, house prices continued to rise and wealth continued to accumulate. This accumulation has not only attracted more investors to the real estate market, but also made those who entered early reap the rewards. Imagine if you bought a property 10 years ago, the value has at least doubled by now, and in some popular cities, that number may have multiplied.

This fully demonstrates the money-making effect of the real estate market, where both ordinary home buyers and savvy investors are reaping significant benefits from the property. Discerning investors, in particular, can achieve financial freedom in as little as 10 years with just a few properties invested.

In the real estate market, the investment properties of houses attract countless home buyers. Most people have the impression that house prices have always continued to rise, and rarely fallen. Especially for the post-80s and post-90s, they have hardly experienced a drop in house prices, so many people in the current property market are convinced that house prices will not fall. Even if housing prices stagnate or fall in some cities, most people still believe that this is only a temporary adjustment and that house prices will continue to rise in the future. In the next 10 years, will real estate be a wealth or a burden? In this regard, insiders have analyzed it from three aspects.

1. Housing resources have tended to be saturated, and the home ownership rate has continued to rise

Once upon a time, in China in the 70s of the last century, the per capita housing area of urban residents was only about 3.8 square meters, and nearly 9 million families faced the dilemma of having no houses to live in. However, after decades of rapid development of the real estate market, the housing conditions of urban residents in mainland China have undergone earth-shaking changes. According to the latest data, by the end of 2020, the per capita housing area of urban residents in mainland China had exceeded 40 square meters. This means that a family of four has an average of more than 160 square meters of residential space, which meets the needs of the family.

The data released by the central bank further reveals an indisputable fact: the homeownership rate of urban households in mainland China has exceeded 96.86%, with an average of more than 1.5 houses per household, and even more than 40% of households owning 2 or more homes. This not only highlights the surplus of housing resources in the mainland, but also shows a significant increase in the homeownership rate.

However, despite the fact that most urban households already own their homes, there are still a large number of homebuyers in the property market. The main reason is that some investors hold a large number of properties, resulting in an imbalance between supply and demand in the market. With the gradual tightening of the state's regulatory policies on the real estate market, the living space of property speculators has been squeezed, and housing prices have gradually returned to rationality. Recently, the number of second-hand home listings in many cities has continued to grow, which is undoubtedly a strong signal: some investors are selling their properties, and the supply of housing in the market is increasing. With the increase in the number of housing in the market, the property market will be oversupplied, and housing prices will gradually tend to a reasonable level.

2. The improvement of economic conditions will promote the transformation of housing market demand to quality

In the past, housing prices continued to rise, and property investment became an effective means of wealth appreciation. Whether it is an investor or a buyer who just needs to buy a house, investment is the main purpose of buying a house. However, with the saturation of housing resources and the concept of "housing for living, not speculation" deeply rooted in the hearts of the people, the purpose of home buyers is gradually shifting to residential demand.

When buyers turn their attention to the quality of living, their requirements for housing also increase. Increasingly, the market is becoming popular for mid-to-high-end residential types such as low-rise bungalows, small high-rise residences, and high-quality high-rise residences.

At the same time, some low-quality commercial housing, resettlement housing and small property rights may be gradually eliminated from the market. Especially in some third- and fourth-tier cities, due to the oversupply of housing resources and the outflow of population, these low-quality homes may face the dilemma of selling even if the price is reduced. Not only does this mean that these homes are no longer a symbol of wealth, but they may even become a burden for home buyers.

3. The income from investing in real estate is declining, and the cost of holding real estate will surge in the future

With the tightening of property market control policies and the surplus of housing resources, the property market investment environment will become increasingly severe in the next decade. For housing prices in third- and fourth-tier cities, there may be stagnation or decline in the future, and the return on investment property may gradually decrease, and even face the risk of loss.

However, for first- and second-tier hotspot cities, housing prices are still expected to continue to rise due to continued population growth. However, house price growth will gradually stabilize and will not soar as much as in the past. Therefore, investors need to be more cautious in their choice of property investment.

To make matters worse, the cost of holding a property will increase significantly over the next decade. Currently, Hebei, Yunnan and Hunan provinces have implemented a landlord tax, and it is likely to be rolled out nationwide in the future. In addition, there is also a possibility that a property tax will be introduced within five years, which will significantly increase the cost of holding a property. For example, some experts have suggested a tiered property tax system, which would set a tax rate of between 0.3% and 1.5% for 40 square metres of tax-free area per person. This means that the larger the size of the property held, the higher the proportion of property tax that will need to be paid in the future. In addition to this, a vacancy tax may also become a reality, further increasing the cost of property holding.

In Tier 1 and Tier 2 hotspots, quality properties will continue to be a symbol of wealth. However, lower-quality properties, especially in third- and fourth-tier cities, could turn from wealth to a burden in the next decade. Therefore, investors need to pay more attention to factors such as the quality and location of the property, and carefully choose investment objects.