Group 1: Market Psychology and Behavior - The phenomenon of "buying less when prices drop" is influenced by economic laws, psychological expectations, financial risks, and policy environments [1] - According to behavioral economics' "prospect theory," individuals are 2.75 times more sensitive to losses than to gains, leading to anxiety about potential further price drops [4] - In Shenzhen's real estate market, a 1% decrease in housing prices results in a 3.2% reduction in viewing activity, illustrating a typical "wait-and-see" effect [4] Group 2: Investment and Asset Value Concerns - The proportion of housing assets in Chinese households is 77%, significantly higher than the 34% in the U.S., leading to fears of asset devaluation during price declines [4] - Historical examples, such as the 87% drop in land prices in Japan during the "lost thirty years," create a collective memory of falling prices, reinforcing risk-averse behavior among buyers [4] Group 3: Financial Risks and Credit Dynamics - When housing prices fall beyond the down payment ratio (typically 30%), buyers may face "negative equity" situations [6] - A 5% drop in housing prices can increase bank mortgage default rates by 0.8 percentage points, prompting banks to tighten lending conditions, creating a downward spiral in demand and prices [6] - High-leverage investors may face amplified losses, with a 5% price drop potentially leading to a 20% loss, resulting in panic selling that exacerbates market oversupply [6] Group 4: Economic and Income Expectations - Downward trends in housing prices often coincide with economic slowdowns, as evidenced by a 21.3% youth unemployment rate in China and a 3.8% growth in disposable income [8] - The rental market typically weakens alongside falling housing prices, diminishing the cost-effectiveness of buying versus renting [8] Group 5: Policy and Regulatory Impacts - Local governments' price control measures can lead to transaction freezes, as seen in Kunming, where a proposed 30% price drop resulted in zero sales over three months [10] - Although interest rate cuts may stimulate demand, the anticipated losses from falling prices often outweigh the benefits of lower rates [10] Group 6: Supply and Demand Dynamics - The average housing area per urban resident in China is 41 square meters, surpassing many developed countries, leading to a new normal of supply-demand imbalance as urbanization rates exceed 65% [12] - The population eligible for home purchases is declining, with a significant drop in the number of individuals in their 20s and 30s, alongside rising rates of single living and non-marriage [12] Group 7: Shifts in Investment Preferences - Chinese households are reducing their real estate investment proportions, with a significant increase in savings compared to a modest rise in housing loans [12] - Alternative investment options such as gold, insurance, and financial products are diverting funds away from home purchases [12] Group 8: Future Market Outlook - The current demand contraction due to falling prices represents a transition from irrational exuberance to a return to value, potentially leading to a healthier housing system focused on genuine residential needs [14] - The Singaporean housing model suggests that maintaining homeownership rates above 90% and stabilizing price-to-income ratios can enhance market resilience [15] - Implementing mechanisms to buffer price fluctuations and developing new holding models, such as real estate investment trusts (REITs), can mitigate individual risk exposure [15]