Core Viewpoint - The prediction made by Jack Ma regarding the real estate market, stating that housing prices would become as cheap as scallions, is now being validated as the market experiences significant price declines, aligning with his forecast [1][3]. Group 1: Market Trends - Since the second half of 2021, the domestic real estate market has entered a long-term adjustment phase, with prices in second and third-tier cities like Zhengzhou, Wuhan, and Nanjing already declining [3]. - By 2023, first-tier cities such as Shanghai and Shenzhen have also shown noticeable price adjustments, with average housing prices dropping over 30% from their historical peaks [3]. - In some third and fourth-tier cities, housing prices have indeed fallen to levels comparable to Jack Ma's "scallion" prices, with properties available for just tens of thousands or hundreds of thousands [3]. Group 2: Demographic Signals - China has entered an aging society, with the number of individuals aged 60 and above surpassing 310 million by 2024, and projected to exceed 400 million by 2035, leading to a significant decrease in housing demand from younger populations [6]. - The population of young people is declining, with 175 million from the post-90s generation and 145 million from the post-00s generation, indicating that most elderly individuals already own homes and do not require new purchases [6]. Group 3: Supply and Demand Dynamics - The real estate market is experiencing a long-term trend of oversupply, with 600 million existing homes capable of accommodating 3 billion people, coupled with millions of new homes entering the market annually [8]. - The decline in housing prices has diminished the investment appeal, causing potential buyers to adopt a wait-and-see approach, further exacerbating the oversupply situation [8]. Group 4: Policy Implications - The government has announced plans to provide 6 million affordable housing units over the next five years, averaging 1.2 million units annually, aimed at meeting the housing needs of low-income urban residents [10]. - As affordable housing becomes more available, it is expected to significantly reduce the purchasing costs for low-income families, leading to a diversion of demand from the commercial housing market and increasing downward pressure on prices [10].

Core Viewpoint - The domestic real estate market in China has entered a long-term adjustment phase, with average housing prices dropping over 30% and some cities experiencing declines of over 60% from historical highs [2][4]. Group 1: Market Trends - Housing prices in second and third-tier cities have already seen significant declines, while first-tier cities like Shanghai and Shenzhen are expected to follow suit, indicating a potential "correction" in these markets [8]. - The current housing market is characterized by an oversupply, with approximately 600 million residential units available, which could accommodate 3 billion people if each unit housed five individuals [4]. - The economic downturn has led to reduced incomes and increased unemployment, making it difficult for many to sustain high housing prices [4]. Group 2: Consumer Behavior - An increasing number of young people are opting to rent rather than buy homes due to the financial burden of high property prices and the associated long-term mortgage commitments [11]. - The rental market is perceived as more financially viable for young individuals, allowing them to save money while waiting for housing prices to align more closely with local incomes [11]. Group 3: Policy and Supply - The government is expected to accelerate the introduction of affordable housing, with a plan to provide 6 million units over the next five years, averaging 1.2 million units annually [13]. - The shift towards selling existing homes rather than pre-sold properties is anticipated to increase, allowing buyers to inspect homes before purchasing, which may alleviate some market pressures [12].

Core Insights - The real estate market in China is experiencing a paradox where, despite ongoing government stimulus measures, the market remains sluggish with a trend of "declining volume and prices" [1] - The demographic shift towards an aging population is leading to a decrease in first-time homebuyers, contributing to downward pressure on housing prices [4] - The imbalance between housing prices and income levels is significant, with ratios in major cities far exceeding those in developed countries, indicating a potential for price corrections [8] - The expansion of property tax trials is expected to increase costs for multi-property owners, potentially leading to a surge in second-hand property listings and further downward pressure on prices [10] - The government plans to accelerate the introduction of affordable housing, which may divert demand from the commercial housing market and expedite market adjustments [12] - A growing trend among young people to prefer renting over buying is evident, with a significant decline in the belief that homeownership is essential, indicating a long-term decline in demand for commercial housing [14] - The overall shift in real estate policy from promoting growth to risk prevention suggests a long-term adjustment phase for the market, aiming to align high housing prices with their residential purpose [15] Summary by Categories Demographic Changes - China has entered a moderately aging society, with the population aged 60 and above expected to reach 296 million by the end of 2024 and 400 million by 2035, leading to fewer first-time homebuyers [4] Housing Price and Income Disparity - In major cities like Shanghai and Shenzhen, the housing price-to-income ratio is around 40, while in second and third-tier cities it ranges from 20 to 25, indicating a significant disconnect from local income levels [8] Taxation and Policy Changes - The property tax pilot program is expanding, with rates set between 0.5% and 1.2% based on property value, which will increase costs for owners of multiple properties and could lead to a spike in second-hand listings [10] Affordable Housing Initiatives - The government has announced plans to invest in 6 million affordable housing units over the next five years, averaging 1.2 million units per year, to address housing needs for low-income families [12] Shifts in Housing Preferences - A notable shift in attitudes among young people is observed, with the percentage believing in the necessity of homeownership dropping from 78% in 2020 to 42% in 2025, while those preferring to rent increased from 15% to 36% [14] Market Adjustment Trends - The real estate market is transitioning from a phase of excessive growth to a long-term adjustment, with policies now focused on risk prevention rather than growth stimulation [15]