Recently, with the gradual strengthening of local government rescue policies, the real estate market has shown certain fluctuations, and the debate on whether to buy a house has become more and more intense. Some people advocate taking advantage of the relatively low price of housing to act decisively, fearing that if housing prices rise in five years, the cost of buying a house will increase significantly. The other side has a wait-and-see attitude, believing that the current home purchase may face higher risks, and the best strategy is to wait for the market to clear.
In the face of such differences, Wang Shi, a well-known entrepreneur, once expressed his opinion, pointing out that in the context of global monetary easing, inflationary pressures are gradually emerging, which may have an impact on commodity prices. Although Wang Shi did not directly indicate the trend of housing prices, he almost made it clear about the trend of housing prices. Let's take a look at the main content of Wang Shi's post:
1. At present, many countries are implementing monetary easing policies in order to quickly recover and improve economic development;
2. Due to the over-issuance of currency, it will lead to rising commodity prices and imported inflation;
3. The picture is used to express pork and real estate, in fact, what I want to express is that housing prices will rise.
However, we must look at this issue rationally. The rise and fall of housing prices is affected by a combination of many factors, including economic development, policy regulation, population mobility, etc. Therefore, the decision to buy a home cannot be made hastily based on a single factor or the opinion of an individual. For the average home buyer, it is more critical to make an informed choice based on their financial situation, home buying needs, and risk tolerance.
In addition, we need to pay close attention to market trends and related information so that we can adjust our home buying plans in a timely manner. At the same time, it is crucial to maintain a rational investment mindset and avoid blindly following the herd or panic buying. After all, buying a home is a long-term and significant investment that requires us to be cautious and ensure that we maximize our benefits.
In the author's view, the rise and fall of housing prices is not determined by costs alone, and rising costs do not mean that commodity prices will necessarily rise, and the downward trend of housing prices in the past two years is a powerful proof of this. Therefore, in order to deeply analyze the trend of housing prices, we must conduct detailed analysis and judgment in combination with the actual situation of the current property market.
1. As a key factor affecting the rise and fall of housing prices, the logic behind it is deeply rooted in the relationship between supply and demand
Over the past 20 years, housing prices in mainland China have risen as fast as a high-speed train, repeatedly breaking record highs. As a result, many people are convinced that house prices will only go up, not down. However, the drivers of rising house prices are far more than that, with the increase in construction costs and the strong demand for housing forming a two-wheel driving force for the rise in house prices.
In 1978, for example, the per capita housing area of urban residents in China was only 3.6 square meters, and there were more than 8 million urban housing vacancies, highlighting the extreme scarcity of housing resources. Since the full commoditization of housing in 1998, people's demand for housing has been released like a flood, resulting in a short period of housing resources in short supply, and housing prices have risen sharply.
The housing reform in 1998 not only unleashed housing demand, but also promoted the vigorous development of the real estate industry. Since then, the mainland's real estate industry has been on a high-speed trajectory, with a large number of homes springing up and cities expanding. However, with the advancement of urbanization, a large number of rural people have poured into cities, and the demand for housing continues to be strong. Therefore, despite the rapid development of the real estate industry, the shortage of housing resources has existed for many years, and housing prices have been rising in a state of imbalance between supply and demand. Coupled with the speculation of property speculators, housing prices are rising at a rate far faster than most people's wages.
Time flies, and in the blink of an eye, the real estate industry in mainland China has gone through more than 20 spring and autumn seasons. At present, the problem of shortage of housing resources has been effectively solved. According to the National Bureau of Statistics and the Central Bank, more than 96.86 percent of urban households already own a house, with an average of 1.5 houses, and the per capita housing area of urban residents has jumped to more than 40 square meters.
In the context of the current tightening of property market control policies, the problem of excess housing resources has gradually surfaced. Especially when some investors are pessimistic about the trend of housing prices, they not only stop investing in real estate, but start to sell properties on a large scale. Statistics show that in March this year, the number of second-hand housing listings nationwide surged by 86% month-on-month, almost double that of February. Moreover, since March 2021, the number of second-hand housing listings nationwide has continued to rise, while the transaction volume has been declining, showing that the sales pressure on the second-hand housing market is increasing. At present, the number of second-hand houses listed in Beijing, Zhengzhou, Harbin, Nanjing, Wuhan, Chengdu and Chongqing has exceeded 100,000 units, and some cities have even exceeded 150,000 units, and the number of second-hand housing listings in Chongqing has exceeded 200,000 units.
Similar to the second-hand housing market, the new housing market is facing the same problem. By the end of 2023, the inventory of newly built commercial housing in 100 cities across the country has accumulated to 510 million square meters. What is more noteworthy is that, like second-hand houses, while the inventory of new houses is rising, the difficulty of selling is gradually increasing. Statistics show that both the new housing market and the second-hand housing market are now oversupplied, and the phenomenon of oversupply of housing resources is becoming more and more serious.
2. More and more people are not optimistic about housing prices and sell real estate, resulting in the impact of second-hand housing prices on new housing prices
Recently, a friend of mine who works as a real estate agent revealed to me that today's home buyers seem to be less enthusiastic about new homes and more interested in second-hand homes. Although the brokerage fee for a second-hand home is usually around 2% of the price of the house, it is relatively low compared to the commission for a new home. Although the process of buying a second-hand home transaction can take up to two or three months, real estate agents are still more willing to recommend new homes.
In order to boost new home sales, developers offer attractive commissions, which also makes real estate agents more willing to recommend new homes to buyers. However, homebuyers are now more inclined to choose second-hand homes. One of the important reasons is that in many cities, the price of second-hand homes is already lower than that of new homes. This is because more and more people are bearish on house prices and start selling their properties, resulting in more and more second-hand homes. Surprisingly, many of these second-hand houses are quasi-new houses, and no one has even moved in.
In the past, people were keen to buy new homes, mainly because of the relatively low prices of off-plan properties. However, this low price is often accompanied by false publicity, quality problems, delayed delivery and even the risk of unfinished property. Today's second-hand housing market, however, presents a very different picture. With the increase in the number of second-hand housing listings, the market competition is becoming increasingly fierce, and owners have reduced prices in order to sell as soon as possible. This has led to lower prices of second-hand homes, and some owners are even willing to pay part of the brokerage fees to attract buyers.
Therefore, in the face of quality problems, delayed delivery and the risk of unfinished new homes, even if the developer raises the price, buyers may no longer pay. With the second-hand housing market gaining momentum, developers may need to revisit their sales strategies to respond to this market change.
When analyzing the reasons for the rise and fall of housing prices, it is not difficult to find that the relationship between supply and demand and capital are the decisive factors for the trend of housing prices, and the increase in construction costs does not always directly push up housing prices. Therefore, when we try to predict the future trend of housing prices in a city, it is clear that a single indicator of construction costs is not enough to support our judgment. Instead, we must consider the city's development potential and the supply and demand of the real estate market.
Take the first- and second-tier popular cities as examples, these cities have attracted a large number of population inflows due to their unique economic, cultural and resource advantages, resulting in a continuous strong demand for housing. In the case of an imbalance between supply and demand, housing prices will naturally rise and show an upward trend. However, for third- and fourth-tier cities with declining populations, housing demand will gradually stabilize or decline as the population declines.
Therefore, when analyzing the trend of housing prices, we must take a more comprehensive and in-depth perspective and comprehensively consider various factors in order to draw more accurate and comprehensive conclusions, and not be confused by a single indicator. Only in this way can we better grasp the trend of housing prices and provide strong support for future investment decisions.
The relationship between supply and demand and capital are the decisive factors in the trend of housing prices.