During the Spring Festival, friends in the field of real estate investment, as long as they get together to chat, many people will regret why they didn't sell the house in the first half of 2021 to cash out, and now the house is becoming more and more difficult to sell. Moreover, house prices everywhere have also fallen by 30% from their highest position in 2021. Taking Shanghai as an example, in 2021, the average price of old and dilapidated buildings in the city center was more than 100,000 yuan per square meter, and by the end of 2023, the house price has fallen to 6-70,000 yuan per square meter.
There are two main reasons for the obvious decline in housing prices in various places in recent years: one is the continuous fermentation of the mainland's regulatory policies. As early as 2016, the mainland began to regulate the real estate market, and it has not stopped until 2021. Affected by this, the demand for investment and speculation has been curbed, and the trend of real estate adjustment is very obvious.
The other is that due to the impact of the epidemic, many households have reduced their income or lost their jobs, and the people's ability to buy houses has been weakened. At the same time, after years of the epidemic, many families who have improved their home buyers have become more and more rational about buying houses than before. Instead of buying a house impulsively as in the past, you have to decide whether you need to buy a house according to your actual situation.
As for the current real estate market trend, Li Ka-shing has already predicted. A few years ago, Li Ka-shing said that housing prices will face a major reshuffle in the next five years, and property speculation needs to be cautious, and the debt expansion of many mainland developers is coming to an end. Judging by the current real estate situation, these predictions are correct. Now speculators are facing the distress that the market value of the house is shrinking, but the house is difficult to realize. Now that many developers are mired in debt, the real estate industry is deleveraging and scaling back investment.
In fact, as early as August 2023, the executive meeting of the State Council deliberated and adopted the "Guiding Opinions on Planning and Construction of Affordable Housing", which proposed: the construction of affordable housing will be accelerated, and the proportion of affordable housing in the total housing supply will be increased.
Moreover, it also proposed that "the market belongs to the market, and the affordable housing belongs to the affordable housing". At the same time, the document also made it clear that 35 cities with a population of more than 3 million will take the lead in piloting, and 6 million affordable housing units will be listed in the next five years, with an average of 1.2 million units per year. This document has been rated by many media as a new round of housing reform is about to start.
The reason why the mainland wants to start a new round of housing reform is mainly because the housing prices in some parts of the country are really high, and many low- and middle-income families cannot afford to buy houses, so they can only follow the Singapore model and divide the real estate market into two parts: one is the commercial housing market, and the other is the affordable housing market. Through the "market + security" model, the price of the commercial housing market can fluctuate freely, and low-income groups can solve the housing problem through the affordable housing provided by the government.
As for the current promotion of affordable housing construction in the mainland, Li Ka-shing has long made a prediction, he once said: The real estate market in the mainland is a major stubborn disease, and the problem of hundreds of millions of people who just need to live must be solved. Learn from Singapore and build more public rental housing and affordable housing. And Li Ka-shing's prediction many years ago also coincides with the current new round of housing reform. The new round of housing reform is to provide more affordable housing, rental housing, etc., to solve the housing needs of low-income groups, so as to make up for this shortcoming. I have to say that Li Ka-shing's prediction is still very accurate.
So, now that Li Ka-shing's many predictions have come true, the mainland will usher in a new round of housing reform in 2024. For ordinary people, what preparations should be made in advance? One is that if you are a low-income family in an urban area, you can not buy commercial housing for the time being, because in the next few years, a large number of affordable housing in the mainland will enter the market, and the cost of housing will drop significantly.
The other is that there are several sets of old and dilapidated speculators in their hands, and there will be a large number of new commercial houses in the future, as well as affordable housing to enter the market, and the quality of the houses will definitely be better than the old and dilapidated ones. Speculators who own several old and dilapidated houses are likely to face the distress of shrinking the market value of housing prices and the fact that their houses are becoming more and more unsellable. Therefore, while the old and small can still be sold now, it is better to sell at a low price and settle the bag as soon as possible.