Core Viewpoint - The real estate market is undergoing a significant adjustment, with contrasting opinions from business leaders on whether not buying property in the next two years will lead to regret in five years. Group 1: Current Market Conditions - As of June 2023, the number of cities experiencing a decline in new home prices has risen to 38, an increase of 14 from May, while the number of cities with falling second-hand home prices has reached 63, up by 8 from May [1] - New home transaction volume and area have significantly decreased in the first half of the year, while the number of second-hand homes listed for sale has surged, with 1.99 million units listed in 13 major cities by early June, a 25% increase from 1.59 million at the beginning of the year [1] Group 2: Government Response - In response to the declining real estate market, local governments have implemented various measures, including relaxing purchase and sale restrictions, lowering deposit rates, and reducing mortgage rates to below 4% [2] - Many cities have also raised the upper limits for public housing loan amounts and allowed the use of public housing balances for down payments to stimulate demand [2] Group 3: Expert Opinions - Business leaders like Cao Dewang argue that real estate is merely a collection of bricks and mortar, predicting a continuous decline in property value and advising the sale of excess properties [4] - Ren Zhengfei shares a similar view, stating that high property prices hinder the development of the real economy and increase operational costs for businesses, suggesting that the current situation is unsustainable [4] Group 4: Market Dynamics - The demand for new homes is gradually shrinking, as many families now own multiple properties, and factors such as an aging population, late marriage, and declining birth rates are expected to further reduce demand for new homes [4] - The speculative investment demand is also retreating, as speculators typically buy in rising markets and exit when prices fall, compounded by increasing calls for property taxes that raise holding costs [4] - The impact of the pandemic has weakened the purchasing power of the public, leading to reduced household incomes and more cautious buying decisions, which further suppresses demand for improved housing [5]

Core Insights - The current real estate market is experiencing a paradox where despite lower down payment ratios, reduced loan interest rates, and incentives from developers, housing prices continue to decline [1][3] - The key issue lies in the psychological expectations of buyers, who are hesitant to purchase due to fears of further price drops [3][5] - The supply-demand dynamics have shifted, with many cities now having sufficient housing supply, leading to a change in buyer demographics and attitudes towards homeownership [3][5] Policy Impact - Multiple rounds of government policies aimed at stimulating the housing market have been implemented, including relaxed standards for first-time homebuyers and financial incentives [1][3] - Despite these measures, over fifty cities have reported continued declines in second-hand housing prices [1] Market Dynamics - The financial situation and mindset of consumers have changed, with many individuals facing unstable incomes and depleted savings, making them reluctant to take on long-term mortgages [5][6] - Developers are under pressure to sell properties quickly, often leading to significant price reductions for new listings, which in turn affects the prices of surrounding second-hand homes [5][8] Investment Perspective - The current market conditions present a unique opportunity for genuine homebuyers to negotiate better deals and take their time in selecting properties [5][9] - For investors, a more cautious approach is advised as the era of guaranteed profits from real estate investments has ended, with future opportunities likely to be more selective and structural [6][8] Future Outlook - The real estate market may be entering a new phase characterized by price differentiation across cities and neighborhoods, with some areas continuing to adjust while others stabilize [8][9] - The shift away from viewing homes solely as investment assets towards prioritizing residential needs may lead to a more mature real estate market [9]

Core Viewpoint - The Chinese real estate market is experiencing a significant downturn, with average second-hand residential prices in major cities dropping to 13,691 yuan per square meter, a decrease of 0.75% month-on-month and 7.26% year-on-year, prompting various government interventions to stimulate the market [1] Group 1: Market Trends - The average price of second-hand residential properties in June fell to 13,691 yuan per square meter, reflecting a month-on-month decline of 0.75% and a year-on-year drop of 7.26% [1] - Government measures to stimulate the market include lowering mortgage rates to around 3% and reducing down payment ratios to 15%, with some first-tier cities lifting purchase restrictions entirely [1] - Predictions indicate that while first-tier cities may see a potential rebound in property values due to government support and strong demand, second and third-tier cities are expected to continue facing downward pressure [1][2] Group 2: Price Dynamics - The current housing price bubble is evident, with first-tier cities having a price-to-income ratio of 40 and second and third-tier cities ranging from 20 to 25, indicating a significant disconnect from local income levels [4] - The value of properties is quietly depreciating, particularly in first-tier cities where many properties valued at 3 million yuan are older and less resilient to price drops [4] - The myth that first-tier city prices will not decline has been shattered, as income growth has slowed significantly, reducing purchasing power [4][5] Group 3: Demographic Changes - First-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen are experiencing negative population growth, with outflows exceeding inflows, primarily due to high housing costs [5] - The declining attractiveness of first-tier cities due to rising living costs is expected to lead to a gradual return of property prices to levels that align with local income [5]

Core Viewpoint - The article discusses the current state of the Chinese real estate market, highlighting the challenges and potential strategies for property owners amidst a significant market downturn. It emphasizes the foresight of Wang Jianlin, who sold off assets in anticipation of market risks, and suggests that selling excess properties now may be a wise decision given the market conditions [1][3]. Market Trends - In 2023, the national sales area of commercial housing in China was approximately 1.117 billion square meters, a year-on-year decrease of 8.5%, marking the lowest level since 2012. The sales revenue was about 11.66 trillion yuan, down 6.5% year-on-year, the lowest since 2016 [1]. - The average price of second-hand homes in 100 cities has been declining for 10 consecutive months, indicating a widespread drop in property values [1]. Government Response - In response to the ongoing downturn, local governments have implemented various measures to stimulate the market, including lowering mortgage rates to below 4% and lifting purchase restrictions. Additionally, the central government has introduced major projects, including urban village renovations, which may temporarily stabilize housing prices by increasing demand from displaced residents [1]. Market Saturation - Wang Jianlin pointed out that the real estate market in China has reached a saturation point after over 20 years of rapid development since the housing reform in 1998. The current housing supply and purchasing power have peaked, leading to a likely decline in property prices as both residents and developers reduce leverage [4][6]. Excess Supply - The Ministry of Housing and Urban-Rural Development reported that China has 600 million residential units, which could accommodate 3 billion people if each unit housed five individuals. This oversupply has become apparent as the market shifts from speculation to a focus on housing for living, indicating a high probability of future price declines [6]. Income Constraints - The purchasing power of the general public has been severely impacted by the pandemic, with many experiencing reduced incomes or unemployment. This has led to a more cautious approach to home buying, suggesting that property prices will likely stabilize with a downward trend [7]. Debt Levels - Since the first round of housing reform began in 1998, the debt levels of Chinese residents have surged from 5% to 71.5%, limiting the potential for further leverage. This context supports the argument that selling excess properties now may be a more prudent choice [7].

Core Viewpoint - The future of the real estate market is uncertain, with opinions suggesting that not buying a house in 2024 may lead to relief rather than regret in five years [6][8]. Group 1: Market Trends - Since 2021, the real estate market has entered a prolonged adjustment period, with a significant decline in sales. In the first half of 2024, the national commercial housing sales area was 4.79 trillion square meters, a year-on-year decrease of 19%, and sales revenue dropped to 4.71 trillion yuan, a staggering year-on-year decline of 25% [3]. - The average price of second-hand residential properties in 100 cities has been falling for 27 consecutive months, reaching 14,653 yuan per square meter in July 2024, with a month-on-month decrease of 0.74% [3]. Group 2: Historical Context - The real estate market in China experienced a boom starting from the housing reform in 1998, with average prices soaring from 2,000 yuan per square meter to a peak of 11,000 yuan per square meter in 2021, representing a growth of 5.5 times. In first-tier cities, prices increased from 3,000 yuan per square meter to 60,000-70,000 yuan per square meter, a more than twenty-fold increase [4]. Group 3: Expert Predictions - Business leaders like Cao Dewang and Li Ka-shing predict that housing prices will likely decrease in the future, indicating that the era of only rising prices is over. They suggest that buying a house in five years may be more advantageous [6][8]. - The predictions highlight a potential reduction in housing demand due to lower marriage and childbirth intentions among the younger generation, alongside a long-term adjustment trend in the real estate market that may still have room for price corrections [8]. Group 4: Government Response - In response to the ongoing downturn in the real estate market, various local governments have implemented measures to stimulate demand, including relaxing purchase and loan restrictions, lowering mortgage rates and down payment ratios, and increasing housing provident fund loan limits [9].

Core Viewpoint - The real estate market in China is experiencing an unusual downturn despite policy easing and interest rate cuts, with national second-hand housing prices declining for 26 consecutive months, averaging 14,762 yuan per square meter in June [1]. Group 1: Housing Supply and Demand - There is a significant oversupply of housing in China, with 600 million buildings available, enough to accommodate 60 billion people, while the current population is less than 1.4 billion [1]. - The number of vacant homes has exceeded 120 million, sufficient to house 300 to 400 million people, leading to the emergence of "ghost towns" in some cities [1]. - 96% of households own at least one property, and 41.5% own more than two, indicating a saturated market with limited demand from first-time buyers [1]. Group 2: Market Conditions - New housing inventory has surpassed 9.3 million units, with 74.5 million square meters of unsold property, indicating a significant backlog in the market [3]. - Major cities like Beijing, Shanghai, and Guangzhou are seeing record-high listings for second-hand homes, but buyer interest is dwindling, leading to increased urgency among sellers [3]. - Speculative investors have largely exited the market, leading to a decline in property values and a lack of new entrants, further complicating the market recovery [3]. Group 3: Economic Factors - In Q1 2024, individual income tax revenue dropped by 15.9%, reflecting reduced disposable income and increased financial strain on households, which diminishes the likelihood of home purchases [5]. - There has been a significant increase in household savings, with an additional 9.27 trillion yuan saved in the first half of the year, indicating a shift towards saving rather than spending [5]. - Changing consumer attitudes among younger generations have led to a preference for renting, side hustles, and investment over home ownership, further suppressing demand [5]. Group 4: Urbanization Trends - The urbanization rate in China has reached over 65%, nearing levels seen in developed countries, which limits the influx of rural populations into urban areas for home purchases [5]. - The peak of urbanization suggests that the long-term demand driver for the housing market is diminishing, impacting future growth prospects [5]. Group 5: Market Outlook - The combination of severe housing oversupply, high inventory levels, economic pressures on residents, and the end of urbanization growth indicates that the real estate market is in a deep adjustment phase with little chance of a significant rebound in the short term [7]. - Stakeholders are advised to reconsider their strategies, as properties may no longer serve as a reliable asset for wealth accumulation and could instead pose financial risks [7].

Core Viewpoint - The Chinese real estate market has entered a new adjustment cycle since the relaxation of pandemic controls in 2023, driven by long-accumulated factors, with significant declines in new home transactions and a surge in second-hand home listings [1][3]. Market Trends - From March 2023, both the transaction volume and area of new homes have decreased, while the second-hand housing market has seen a dramatic increase in listings, with cities like Chengdu and Chongqing surpassing 200,000 listings and Shanghai exceeding 180,000 by the end of June [1]. - By July, the second-hand housing price index for 100 cities showed a year-on-year decline in 96 cities, indicating a widespread downturn in the market [1]. Government Response - In response to falling housing prices, local governments have implemented various "market rescue" policies, including relaxing purchase and sale restrictions in many second and third-tier cities, reducing mortgage rates below 4%, and increasing housing fund loan limits to alleviate financial pressure on first-time buyers [1]. - The introduction of the "recognize house but not loan" policy aims to stimulate demand for improved housing, although the effectiveness of these measures has been limited [1]. Economic Impact - The decline in housing prices is attributed to two main factors: the impact of the pandemic leading to reduced incomes and job losses, which have diminished purchasing power, and the ongoing decrease in property values since the second half of 2021, eroding the "wealth effect" associated with real estate [3]. - The suggestion to utilize one-third of the 15 trillion yuan in household savings to stimulate real estate purchases and related consumption has sparked controversy, as many view these savings as essential for financial security [4]. Market Sentiment - Public sentiment reflects skepticism about the real estate market's future, with a common perception that the speculative nature of real estate investment is nearing its end, as indicated by a remark from a typical consumer highlighting the end of the "hot potato" game in real estate [6]. - Experts suggest that the government's recent policies aim to prevent drastic fluctuations in the market and achieve a "soft landing," but the long-term outlook remains uncertain, with the potential for continued adjustments in the housing market [6].

Core Viewpoint - The domestic real estate market in China is experiencing a long-term adjustment, with significant declines in both sales volume and prices, prompting various government policies aimed at stabilizing the market and encouraging home purchases [1][3]. Group 1: Market Trends - In 2024, the national sales area of commercial housing is expected to decrease by 11.3% year-on-year, with sales revenue declining by 15.7% [1]. - The new residential price index in 300 cities is projected to drop by 3.2% year-on-year, while the second-hand residential price index is expected to fall by 5.1%, marking the third consecutive year of overall price decline [1]. Group 2: Government Policies - Local governments, except for core areas in first-tier cities, have largely relaxed purchase restrictions and increased the upper limit for housing provident fund loans [3]. - Banks have reduced mortgage rates to below 3% and lowered down payment ratios to 1.5% [3]. - Tax authorities have provided exemptions on deed tax and value-added tax for homebuyers [3]. Group 3: Expert Opinions - Jack Ma emphasizes that housing should be for living, not speculation, suggesting that it may be a good time for first-time buyers and those looking to upgrade their homes [3][5]. - Li Ka-shing notes that the market is returning to rationality, and decisions should be based on personal financial situations and family needs when prices reach reasonable levels [5]. Group 4: Buyer Recommendations - For first-time and upgrading homebuyers, 2025 is seen as a favorable time to purchase due to a significant average price drop of 30% since 2022 and ongoing supportive policies [6]. - Speculative buyers are advised to "continue to observe" as there remains considerable market bubble, particularly in first-tier cities like Shanghai and Shenzhen, where price-to-income ratios exceed 40 [7][8]. - Many industry insiders believe that while core areas in first-tier cities may see price increases, third and fourth-tier cities have already experienced significant declines, suggesting a more stable environment for potential buyers in those areas [8].