Core Viewpoint - The significant drop in property prices in Beijing, exemplified by a three-bedroom apartment in Xicheng that fell from 10.2 million to 6.2 million, reflects a market correction rather than a mere bubble burst, indicating a shift in buyer preferences towards core locations and essential amenities [1][3][5]. Market Dynamics - The real estate market in Beijing is increasingly polarized, with core locations retaining value while non-core areas like Bai Guang Road are becoming marginalized. Buyers are now more discerning, prioritizing factors such as school districts, transportation, and commercial facilities over mere location prestige [3][5]. - Stringent purchase restrictions in Beijing have significantly reduced the pool of potential buyers, particularly affecting areas that are neither first-choice for first-time buyers nor popular for upgrades, leading to diminished demand [3][5]. - The previous surge in property prices, driven by speculation rather than intrinsic value, is being corrected as market conditions normalize following policy tightening, resulting in unsustainable price levels being unsustainable [3][5]. Investment Insights - The recent price drop serves as a reminder that high-priced properties do not equate to quality, particularly in non-core areas, which are increasingly viewed as speculative investments rather than solid assets [5][7]. - There are predictions that property prices may continue to decline, with some suggesting a potential further drop of up to 80%, highlighting the volatility and unpredictability of the market [5][7]. - The current situation in Beijing's real estate market can be seen as a dual outcome of both the success of policies aimed at curbing speculation and the consequences of previous excessive speculation, leading to a more rational market environment [5][7].