If you don't buy a house in 2024, you can't afford it in 10 years or you can pick it casually? Wang Jianlin and Ma Guangyuan have the same opinion

New Talks on Real Estate

2024-05-19 00:30Published in Henan

In the city, the house is given multiple roles. It is not only the cradle of children's growth, but also carries the expectations of education; It is also the patron saint of health, which is related to the convenience of public medical care; It is also a witness to welfare and witnesses social progress. With the continuous rise in housing prices, the house has gradually evolved into a good investment item, becoming the most cherished asset for many families. It is undeniable that the house has become more and more important in today's society, and it has almost become a decisive factor in the happiness of young people. Someone once said that the college entrance examination is a springboard to fate, and buying a house is an important leap in life. For those young people who have dreams and desire to put down roots in the city, owning a house means that they are truly integrated into the city and have the qualifications to fall in love, get married, and have children. As a result, the house has long since transcended its physical properties and has become the key to opening the door to happiness.

However, the reality is always challenging. High housing prices discourage many young people, and even if they give it all, it is often out of reach. According to statistics, as of March 2024, the national average house price has dropped to about 9,200 yuan / square meter, but it is still very high overall. In the face of such high housing prices, most young people can only look forward to the house, and even if they choose a down payment mortgage, they are often unable to do so.

The dilemma faced by people is not only that housing prices remain high, but also that personal income growth is far less than the soaring trend of housing prices, which undoubtedly announces that the dream of buying a house is gradually moving away, and this sense of hopelessness has become stronger and stronger over time. According to relevant statistics, back to 2000, the average house price in mainland China was still hovering at a low level of 2,000 yuan/square meter, and the housing price in Beijing's Third Ring Road at that time was only 3,500 yuan/square meter. Today, however, the average house price has soared more than fourfold, and the price of the third ring road in Beijing has skyrocketed by more than 30 times. This housing frenzy has not only swept the capital, but also spread in major cities across the country, and even many small counties, and in the past two decades, housing prices have generally soared more than ten times or even dozens of times.

The rapid rise in housing prices has put many people who have not yet bought a home into a predicament, making a wrong step and a wrong step, and the dream of buying a house is gradually drifting away. At present, there are still many people in the property market who do not have their own residences and have to choose to rent a house to live. According to the data, the number of renters in 2023 has reached 240 million. In this huge group of renters, there are many people who have no choice but to choose renters due to high housing prices. For them, renting a house can provide a temporary solution to their housing needs, but it is not a long-term solution. A rented house is just a place to live, and you can't enjoy the many benefits and rights that come with buying a house. What's more, renting often lacks a sense of belonging and security, and the quality of life is hardly comparable to owning your own home.

It can be seen that the importance of housing for people is self-evident, especially for those who intend to put down roots in the city, buying a house has long become a long-term plan in their minds. And those who had never considered buying a house also came up with the idea of buying a house after experiencing the inconvenience of renting a house several times. What's more, buying a house has long become a shortcut to wealth in the past 20 years, and countless buyers have achieved rapid accumulation of wealth by buying a house, and even more easily entered the palace of financial freedom with only real estate investment. Therefore, buying a house as soon as possible is always an ardent pursuit in the hearts of many people.

However, in the past two years, the continuous decline in housing prices has made many people who originally had the dream of buying a house fall into entanglement and confusion, and even many people have given up their plans to buy a house. In this regard, some people may wonder: Isn't the fall in housing prices a good thing for people who don't yet own a home? Indeed, in a way, the drop in house prices has been a boon for those who are in dire need of a home. But the crux of the matter is that even if house prices have fallen, they remain high and prohibitive for many buyers. Even in some cities where housing prices have rebounded, buying a home is still a heavy burden for most buyers who just need to buy a home, which requires draining a family's savings for many years and saddling it with a mortgage for two or three decades.

Against this backdrop, buyers often regard their home as their most important asset. However, if house prices fall, it means that their hard-earned wealth will suffer. Many people are worried that they will take over at the high price of housing prices and become the so-called "pick-up man". This concern has spread in the minds of many people, making them more cautious and hesitant to buy a house.

Concerns about housing prices actually have a deep social background. Since 2019, many home buyers have deeply experienced the pain of asset shrinkage, and the loss is even as high as 40%, which is indeed shocking. Especially in 2023, although local governments have come to the rescue, housing prices are still difficult to stop. In the past two months, the state has stepped up its efforts to rescue the market, such as the proportion of first-home mortgages has been sharply reduced to 15%, and mortgage interest rates have also fallen to a record low. Obviously, the third round of bailouts has come, but people's enthusiasm for buying houses is still sluggish.

For buyers who just need to buy a house, their original intention of buying a house is undoubtedly to meet the needs of self-occupation. But who wants to see their hard-earned wealth shrink dramatically in the face of falling house prices? As mentioned earlier, the cost of falling housing prices is too large for many families to bear. At the same time, fears of a rebound in housing prices have not diminished. Looking back, there have been many brief declines in house prices before rebounding quickly and even hitting new highs. This uncertainty makes buyers who just need to buy a home feel stressed and anxious when faced with a home purchase decision.

So, if you choose to wait and see in 2024 and don't buy a house, will the house price be too high to reach in five years, or the market will be down, you can choose at will? On this issue, industry bigwigs such as Wang Jianlin, Ma Guangyuan and others all hold similar views.

In 2013, Wang Jianlin made a unique insight into the trend of housing prices in the next ten years. He firmly believes that there is still significant upside potential for housing prices in first- and second-tier cities in the years to come, based on his deep understanding of the urbanization process. He believes that with the continuous advancement of urbanization, a large number of people are pouring into these cities every year, and this population agglomeration effect undoubtedly provides strong support for the continuous rise of housing prices. However, for third- and fourth-tier cities, Wang Jianlin's view is relatively cautious. He believes that due to the severe population loss in these cities, the room for housing prices to rise is relatively limited.

When we look back at Wang Jianlin's prediction, we can't help but find that his prediction seems to have only come true halfway. Because in the past nine years, whether it is a first-tier city, a second-tier city, or a third-tier and fourth-tier city, housing prices have shown a rapid growth trend. So, does this mean that Wang Jianlin's prediction of the trend of housing prices in third- and fourth-tier cities is wrong? Many experts and scholars have different views on this. They believe that although on the surface, housing prices in third- and fourth-tier cities have indeed risen sharply, but this is actually affected by policy factors and normal changes in supply and demand. Especially in 2015, in order to alleviate the pressure on the inventory of the property market, the state implemented the shantytown reform policy, which converted the housing originally used for resettlement into cash compensation, thereby stimulating the purchase demand of the commercial housing market. This policy has caused a large amount of shantytown reform funds to pour into the property market, and at the same time, it has also given birth to a number of demolition households with strong purchasing power. For the relatively small third- and fourth-tier cities, shantytown renovation projects account for a large proportion, so with the influx of capital and demolition households, housing prices will naturally rise.

However, as the old reform policy gradually replaces the shantytown reform policy, the property market in third- and fourth-tier cities is also facing new challenges. After losing the dual support of funds and demolition households, housing prices in these cities have begun to show a downward trend.

Ma Guangyuan, a well-known economist, has long been regarded as a staunch supporter of the real estate market, and has often supported real estate investment in the past. However, in the last two years, his views have changed significantly. I remember that at the beginning of 2020, Ma Guangyuan was still full of confidence about the prospects of the real estate industry, but after the Spring Festival, he publicly warned: "Investing in real estate in third- and fourth-tier cities at the moment is tantamount to playing in risk." Entering 2021, he admitted frankly in an interview: The golden age of real estate has become a thing of the past, and real estate investment is no longer a popular choice. If you want to continue to benefit from this, you need to have deep real estate expertise.

It can be seen that although Ma Guangyuan still has confidence in the real estate industry, he is no longer as resolute as he used to be. Especially for the third and fourth-tier cities, he is no longer optimistic about the trend of housing prices, and predicts that there will be obvious differentiation in housing prices in the future. To this end, he put forward the concept of "three 20%": that is, only 20% of cities, 20% of real estate companies and 20% of real estate are worth investing. In Ma's view, future real estate investment should focus on a small number of high-quality cities, and properties in these cities need to be built by excellent developers. Clearly, the era of mass investment in real estate has quietly come to an end.

At present, the overall housing resources in the mainland have been excessive, and with the continuous influx of new commercial housing into the market, this surplus will only intensify. Houses, as the necessities of people's lives, have naturally increased their requirements for quality. In the context of excess housing resources, reasonable housing prices and rising income levels, the demand for high-quality properties will be increasingly strong in the future, while those with poor quality properties are destined to be gradually eliminated from the market.

Summary: From Wang Jianlin and Ma Guangyuan's insights on the real estate market, it is not difficult to find that although the two expressions are very different, they all point to the same prediction - first- and second-tier cities will continue to rise, while third- and fourth-tier cities will face downward pressure on housing prices. The logic behind this judgment is actually quite straightforward, as a place to live, the price of a house will eventually return to the essence of supply and demand. At that time, the rise and fall of housing prices will depend entirely on the actual demand for housing by the population.

Tier 1 and Tier 2 cities, as well as relatively prosperous regions, are expected to continue to attract a large influx of people over the next five years. The rise in housing prices in these cities will be supported by population growth, making the barriers to buying a home increasingly high, and the general public may find it increasingly unbearable. However, in most third- and fourth-tier cities, the outflow of population is becoming more severe, and the housing supply is increasing. At the same time, without the support of the shantytown reform policy, housing prices in these cities are very likely to rebound and fall in the next five years. At that time, home buyers may be faced with more choice, and housing may become readily available.

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