Core Insights - The Chinese real estate market is experiencing a significant downturn, with a 13.1% year-on-year decline in sales for the top 100 real estate companies, totaling 52,977 billion yuan in the first ten months of the year [1] - The proportion of real estate in Chinese households' total assets is remarkably high at 77%, indicating a heavy reliance on property as a means of wealth preservation and appreciation [1] Group 1: Long-term Price Decline - Since the second half of 2021, the Chinese real estate market has entered an adjustment period due to slowing national income growth and ongoing regulatory policies, leading to price declines spreading from lower-tier cities to major cities like Beijing and Shanghai [6] - The myth that housing prices in first-tier cities would not decline has been broken, with future price trends likely to stabilize with a downward bias [6] Group 2: Increased Difficulty in Property Liquidation - There has been a significant increase in the number of second-hand homes listed for sale, with 1.99 million units in 13 key cities by June, a 25% increase since the beginning of the year [7] - This surge in listings reflects a pessimistic market outlook among speculators, indicating that substantial price reductions of 30% to 50% may be necessary to facilitate transactions [7] Group 3: Rising Holding Costs - Households with multiple properties face significantly higher monthly mortgage payments compared to those with a single property, exacerbated by income reductions and job losses post-pandemic [8] - Additional costs such as property management and heating fees are also increasing, adding to the financial burden on these households [8]

Core Insights - The article discusses the challenges faced by families owning multiple properties in the current real estate market, highlighting three harsh realities they must confront in the coming years [1][3]. Group 1: Market Dynamics - The first harsh reality is the difficulty in selling excess properties, with a significant increase in the number of listings and extended selling periods. As of December 2024, the number of second-hand homes listed in 100 cities exceeded 1.8 million, a 23% increase year-on-year, leading to a situation where buyers have the upper hand [3][4]. - The average transaction period for second-hand homes in key cities has surpassed 180 days, with some properties taking over a year to sell, particularly in less desirable areas [3][4]. Group 2: Holding Costs - The cost of holding properties is rising, with mortgage rates for second homes remaining high, averaging around 5.2% as of late 2024. For a property valued at 1 million, annual interest payments can exceed 52,000, and for two properties, this could exceed 100,000 [5][6]. - Property management fees have also increased, with the average fee reaching 2.8 yuan per square meter per month in 2024, leading to annual costs of approximately 3,360 for a 100 square meter property. Additional costs for vacant properties can add up to 5,000 annually [5][6]. Group 3: Price Segmentation - The article notes a growing disparity in property values, with core urban areas maintaining stable prices while non-core areas experience significant declines. In December 2024, the price index for second-hand homes in core areas of first-tier cities fell only by 0.5%, while non-core areas in third and fourth-tier cities saw declines of 6.8% [7][8]. - The trend is attributed to population migration towards core urban areas, with the urbanization rate reaching 66.15% in 2024, leading to decreased demand for properties in less populated regions [7][8].