In 2030, how much will a 1 million house be worth now? Insider: It mainly depends on these two points
Once, with 1 million yuan in hand, it was enough to make people have the reputation of "millionaire". However, time has passed, and today this wealth is only enough to buy a property in most small cities. With the vigorous development of the country's economy, our country is becoming more and more prosperous, and the wealth accumulation of residents is also becoming more and more abundant. According to the national statistics on the liabilities and assets of urban households at the end of 2019, the average total assets of urban households were as high as 3.179 million yuan, and the median was 1.630 million yuan. According to the data of the seventh national census, the average household population of the mainland is 2.67, according to which the mainland has entered a new era of "millionaires" per capita. However, many people may lament that they are "averaged" again, but in fact, this may not be the case. Because in the mainland, most of the family wealth is concentrated in fixed assets such as real estate.
According to the statistics of the central bank, real estate fixed assets account for more than eighty percent of the urban household wealth, with an average household value of 2.53 million yuan. And when it comes to property, we have to mention loans. Many people choose to take out loans in order to buy a property, which means that there are a lot of debts in this wealth. When these liabilities are taken into account, many people may not just be "millionaires", but also "millionaires".
So why are people so keen to buy a property and put most of their family's wealth into it? In 2000, for example, if you bought a property near Beijing's Third Ring Road for 300,000 yuan, its value has soared 30 times, that is, 300,000 yuan has become 9 million yuan. Depositing the same amount of 300,000 yuan in the bank, even if calculated according to the 4% fixed deposit interest rate, will only increase to 657,000 yuan after 20 years. Obviously, although the deposit has also doubled, it is difficult to buy a property at 657,000 yuan today, whether near Beijing's Third Ring Road or in many small counties. This stark contrast undoubtedly highlights the great appeal of property investment.
Due to the high profitability of the property market, it is widely believed that investing in property is a very risky business, as if you can buy a property and sit back and wait for the asset to appreciate. However, times have changed, and the current property market pattern has undergone earth-shaking changes. Not only have house prices started to fall, but more and more people are starting to be bearish on them. More importantly, the mainland's housing resources have also shifted from a state of scarcity to a surplus.
Therefore, we need to revisit the question: if we buy a million-dollar property now, will it still be able to increase significantly in 10 years, and thus bring us considerable wealth? So, in such a new environment, can investing in a property worth 1 million yuan still achieve amazing wealth growth and bring huge returns to investors after 10 years? This is indeed a question worth pondering.
Three business leaders with unique insights into the real estate market
Cao Dewang, a well-known private entrepreneur, is sharp and direct about today's high housing prices. He once joked that the house was just a pile of bricks and cement with limited value. Cao Dewang's concern is that there is an oversupply of housing in society, a large number of properties are concentrated in the hands of a few wealthy people, and ordinary people can no longer afford the high housing prices. He even advised his sister to sell off her excess properties, foreseeing a future where the real estate market would evolve into a game of "drumming and passing flowers", in which property owners try to transfer their properties to other property holders.
And Jack Ma, the founder of Alibaba, also has his own unique views on the issue of housing prices. Jack Ma predicts that house prices will fall sharply in the future, especially as the trend of an aging population intensifies, and young people will inherit a large number of properties far more than they actually need. Therefore, Ma believes that the property of the future will not only not bring wealth, but may become a burden for young people. Considering that most of today's young people are only children, they will inherit the property of both parents and grandparents when they get married, and theoretically, a couple may inherit up to six properties.
In contrast, Wang Jianlin, chairman of Wanda Group, has a slightly different view of housing prices. While he is also cautious about the future of the real estate sector and has even pushed Wanda Group to transform its business, he remains optimistic about the trend of house prices in most cities. Especially for those first- and second-tier cities with great economic development potential and continuous population inflow, Wang Jianlin believes that with the growth of population, the demand for housing will continue to increase, which will drive up housing prices. However, Wang Jianlin is more pessimistic about third- and fourth-tier cities, where housing resources are overabundant and population is constantly draining, so housing prices have lost support. Regarding the transformation of Wanda Group, Wang Jianlin explained that it is impossible for any country's real estate industry to continue to prosper for more than 50 years, and China's real estate industry has been developing rapidly for more than 30 years.
From the above three business leaders' views on the real estate market, we can clearly feel their pessimistic attitude towards the future of the real estate industry. Despite this, the country is currently bailing out the market, and the trend of housing prices will gradually stabilize. Does this signal a rebound in house prices? As Wang Jianlin said, there is still room for housing prices in first- and second-tier cities to rise in the future, and housing prices in third- and fourth-tier cities are likely to continue to fall.
Therefore, the value of the property in the future will mainly depend on two main factors: location and quality.
1. Location
Location is a key factor in determining the value of a property, and prime locations are often highly sought after. In bustling first- and second-tier cities, neighboring neighborhoods may be just one road away, but the price difference is quite significant. Not to mention, the gap between suburban and urban housing prices. In particular, high-quality properties located in the heart of the city are loved by people at all times. As the famous entrepreneur Li Ka-shing said, there are three major elements of property value: location, location, or location.
In recent years, the phenomenon of housing price differentiation between cities has become more and more obvious. Housing prices in many third- and fourth-tier cities have declined significantly, while prices in many popular first- and second-tier cities have continued to rise. Taking Yanjiao, Zhuozhou and Xianghe in the Beijing area as examples, housing prices have fallen sharply, with Xianghe housing prices falling to about 5,000 yuan/square meter, and Yanjiao also falling to about 14,000 yuan/square meter. At the same time, housing prices in Beijing's main urban area are relatively stable. Therefore, it is very important to choose the right city and location to buy a house.
At the same time, we also need to pay attention to the property's amenities, transportation accessibility and future value-added potential. A location with excellent amenities and easy access to transportation will not only improve living comfort, but may also lead to a higher return on investment. Therefore, in the process of buying a house, we should not only consider the location, but also consider various factors comprehensively to make an informed choice.
2. Quality
Quality is a key factor in measuring living comfort. Although the mainland has effectively alleviated the shortage of housing resources, most of the housing resources still need to be improved in terms of quality. With the vigorous development of the economy, people's economic conditions continue to improve, and the demand for higher quality housing is increasing. Currently, the demand for mid-to-high-end high-quality homes in mainland China is in short supply, and as demand continues to grow, the prices of these high-quality homes will rise steadily.
Under the current property rescue policy, the market has gradually stabilized, and the volatility of housing prices has become relatively modest. Therefore, when choosing a property, buyers need to pay more attention to the quality of the house in addition to the city and location. The current real estate market is not what it used to be, and properties worth millions of dollars may not be able to increase in value as much as expected in 10 years. However, properties located in popular first- and second-tier cities or with excellent quality still have high potential for appreciation after 10 years. For properties in third- and fourth-tier cities, maintaining their value may be the best outcome. As a result, it is no longer advisable to buy a home purely for investment purposes.