Core Insights - The current real estate market is facing significant challenges, with many homeowners opting to continue paying high mortgage rates rather than selling their properties at a loss [1][3][4] - Despite a continuous decline in second-hand housing prices, a large-scale selling wave has not materialized, leading to a phenomenon of "wait-and-see" among buyers and sellers [7][8] Market Data - As of August 2025, the second-hand housing price index in 70 major cities has dropped for 18 consecutive months, with an average decline of 9.6% [1] - The number of second-hand homes listed for sale increased by only 3.2% year-on-year in the first half of 2025, significantly below the expected growth of over 10% [1] Homeowner Behavior - Many homeowners prefer to endure high mortgage payments rather than sell at a loss, with some believing that the market will recover in the future [3][8] - A survey indicated that 87.3% of respondents feel that owning a home provides a sense of security, and 73.2% would not easily sell their homes even if prices drop [8] Mortgage Default Risks - The personal mortgage non-performing loan ratio has risen from 0.3% in 2023 to 0.9% in the second quarter of 2025, indicating increasing financial strain on homeowners [3] - Approximately 1.5% of the total personal housing loan balance of 38.5 trillion yuan is at risk of default, suggesting over 57 billion yuan in potential mortgage defaults [3] Regional Variations - The phenomenon of mortgage defaults is more pronounced in third- and fourth-tier cities, with some areas reporting default rates close to 5% [4][5] - Developers in these regions are offering solutions like "old-for-new" exchanges to alleviate the pressure on homeowners [5] Banking Sector Response - Banks are providing assistance to borrowers facing temporary repayment difficulties, including options for deferred payments and adjusted repayment plans [7] - Legal measures are being considered for those who maliciously default on their mortgages [7] Future Market Outlook - The real estate market is expected to shift from a focus on buying and selling to providing comprehensive living services, as indicated by industry experts [12] - The need for a return to the fundamental residential nature of housing, moving away from excessive financialization and speculation, is emphasized [12]

Core Viewpoint - The article discusses the looming risks of a real estate bubble in China, suggesting that the current market dynamics resemble a "musical chairs" game, indicating an impending end to speculative activities in the housing market [1][10]. Economic Downturn and Increased Savings - In 2022, the economic downturn and repeated pandemic impacts led to heightened public concerns about job security and income, resulting in a significant increase in the desire to save, with 61.8% of respondents in a survey indicating a preference for saving, up by 3.7 percentage points from the previous quarter [3]. - The increase in savings does not benefit all demographics equally, as the 15 trillion yuan in new deposits primarily flows to wealthier individuals who do not require housing, leaving low-income groups unable to afford homes [3]. High Housing Prices and Affordability Gap - The average price of new residential properties in December 2022 reached 16,177 yuan per square meter, while second-hand homes averaged 15,876 yuan per square meter, making it difficult for most families to afford homes, with typical residential purchases requiring down payments of 500,000 to 600,000 yuan [4]. - The suggestion to stimulate the economy through housing purchases may inadvertently encourage ordinary citizens to become "greater fools" in a high-price market, overlooking the realities of supply and demand [4]. Supply-Demand Imbalance in Real Estate Market - The real estate market is characterized by a significant oversupply, with 96% of households owning at least one property and 1.2 billion vacant homes available, indicating a supply far exceeding demand [6]. - The market is transitioning back to its fundamental purpose of providing housing rather than serving as an investment vehicle, as evidenced by the increasing number of cities entering an adjustment phase where speculative buying is losing its appeal [8]. Future Market Dynamics - The increase in affordable housing options is expected to divert demand away from the commercial housing market, leading to a segmentation of the real estate market into three categories: commercial housing, rental housing, and shared ownership housing [8]. - This segmentation is anticipated to curb speculative buying behaviors and promote healthier market development [8]. Conclusion - The risks associated with a potential real estate bubble are significant, and reliance on real estate to stimulate economic growth is becoming increasingly untenable, signaling the end of a prolonged speculative phase in the market [10].