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In the real estate market in recent years, the price trend of "old and dilapidated" second-hand houses in first-tier cities has become the focus of market attention. After experiencing the price increase in 2016, to the price peak in late 2018 and early 2019, and then to the price decline in the first quarter of 2024, this market phenomenon has undoubtedly brought deep reflection to the majority of home buyers and investors. Recently, a report shows that the price bubble of second-hand housing in first-tier cities has been basically eliminated, and prices have returned to a healthy state. So, what do we think of this change?
First of all, we must recognize that the volatility of the real estate market is a reflection of the laws of the economy. Under the influence of multiple factors such as supply and demand, policy regulation and control, and market expectations, the rise and fall of housing prices is a normal market phenomenon. After a long period of rising prices, the formation of a price bubble is inevitable. However, when the market gradually becomes rational, the bubble will naturally burst and the price will return to a reasonable range.
Second, we should see that the elimination of the "old and small" price bubble in the first-tier cities is beneficial to the healthy development of the market. The bursting of the bubble means the release of market risks, which is conducive to the stability of the market. At the same time, it also provides a more rational and fair home buying environment for home buyers. During the bubble period, many home buyers blindly followed the trend because of panic and speculation, which led to chaos in the market. And now, with the bubble clearing, homebuyers can analyze the market more calmly and make more informed decisions.
Of course, we should also note that the elimination of the "old and small" price bubble in the first-tier cities does not mean that the market is completely free of problems. In the process of falling housing prices, there may also be some unreasonable phenomena, such as developers' price reductions and promotions, and malicious defaults by some owners. Therefore, the government and market players still need to strengthen supervision to maintain the stability and health of the market.
In addition, for investors, the elimination of the "old and small" price bubble in first-tier cities also means an increase in investment risks. In the past, due to the continuous rise in housing prices, many investors blindly followed the trend and ignored the risks. Now, with the gradual rationalization of the market, investors need to analyze the market more carefully and choose the right investment target.
To sum up, the elimination of the "old and small" price bubble in first-tier cities is the inevitable result of market development. We should look at this phenomenon with a rational attitude, neither overly pessimistic nor overly optimistic. At the same time, the government, market players and investors all need to strengthen risk management and jointly promote the healthy development of the real estate market.
