In the eyes of many people, Li Ka-shing is the "originator" of the real estate industry, and he entered the real estate industry as early as the 50s of the last century. Moreover, every time he was able to decisively choose to leave the market before the real estate market corrected. In August 2023, some media reported that Li Ka-shing sold his real estate at a 7% discount, and many people thought that Li Ka-shing was "old and confused". The reality is that Hong Kong's housing prices are indeed in a trend of adjustment. And according to a report by Morgan Stanley, Hong Kong housing prices are expected to fall in 2024.
As for the current domestic real estate market trend, many home-buying families are confused. Buying a house this year and next year is "smart" or "confused". If you buy a house, if the house price continues to fall, you will suffer a significant loss. After all, the current house price has fallen a lot compared to the high level in the second half of 2021. But in the same way, if you buy a house this year and next year, in case housing prices are affected by various favorable policies, there is a trend of stopping and reversing. That doesn't mean that buyers have copied the bottom of the property market and become a big winner in life, which is a "smart move".
In fact, is buying a house this year and next year "smart" or "confused"? Li Ka-shing gave the answer a few years ago. He once made a prediction: In recent years, both mainland and Hong Kong housing prices have remained high, but in the next five years, housing prices will face a major reshuffle, and speculators need to be cautious. Buying a house for your own living, although buying, buying a house is for speculation, or forget it. It's time for many mainland developers to come to an end to the debt expansion of the past few years.
Obviously, Li Ka-shing's above remarks are not only warning speculators to beware of the risks of investing in buying houses in an environment of high housing prices. At the same time, it also reminds developers that the high-debt expansion should be over, otherwise it will fall into a debt crisis. Of course, if you just need a family to buy a house, you can do it at any time. And we believe that buying a house this year and next year will definitely be a "confused" choice for speculators, and it will definitely bring more serious results:
First, the domestic real estate market is already in surplus
According to data provided by the Ministry of Housing and Urban-Rural Development last year, there are 600 million houses on the mainland. Even if there are 5 people in each house, it is enough for 3 billion people. Of course, this also includes small property rights housing, rural residents' housing, resettlement housing, affordable housing, etc. But the serious surplus of domestic houses is already an indisputable fact. Obviously, now the houses in the country are not enough to live in, but there is a surplus. In this case, the decline in housing prices is a high probability thing, and investing in buying a house this year and next year must be a "confused" decision.
Second, the mainland has entered an "aging and declining birthrate" society
According to the National Bureau of Statistics, by the end of 2023, the number of elderly people over 60 years old in the mainland will reach 290 million. In 2023, the number of newborns born in mainland China will only be 9.02 million, once again hitting a record low. This means that the elderly already have their own house and are reluctant to buy a house.
Young people are reluctant to get married, and the purchase demand for marriage houses will be significantly reduced in the future. In addition, many young families are reluctant to have a second or third child. As a result, the number of families who have improved their home purchases is decreasing. With the decrease in demand for rigid and improved housing purchases, it is the general trend and the desire of the people to gradually return housing prices to residential attributes in the future.
Third, people's incomes have decreased, and they are becoming more and more rational in buying houses
Before the pandemic, many families liked to invest in buying a house, which not only could maintain and increase the value of the house, but also people were full of confidence in future income growth. However, after three years of the epidemic, many families have reduced their income or lost their jobs, which will undoubtedly seriously weaken everyone's ability to buy a house, and many families have temporarily shelved their plans to buy a house.
In addition, after experiencing the epidemic, people are becoming more and more rational about buying houses, and they will decide whether to buy a house according to the actual situation of their families. And the impulse to buy a house is becoming less and less like in the past. Therefore, there is a high probability that house prices are on a downward trend. The risk of investing in a house this year and next is indeed very high.
Source: Unobsessed Finance