In the next 5 years, families with "two suites" will usher in 3 results in the future

New Talks on Real Estate

2024-06-02 10:10Published in Henan

The answer to the question of whether housing resources are still scarce has emerged: the current housing market is no longer in short supply, but in excess of demand. According to the latest data, by the end of 2023, the inventory of newly built commercial housing in the country has climbed to a staggering 500 million square meters. At the same time, the second-hand housing market is surging, and the number of listings continues to soar, with many cities breaking through the 100,000 mark, among which the number of second-hand housing listings in Chongqing (only within the urban area) has surprisingly exceeded 200,000 units.

Compared with developers, second-hand house owners often lack sufficient sales channels and publicity means, and most of them can only rely on second-hand housing intermediary platforms for sales. This also leads to the fact that second-hand houses are far more difficult to sell in the market than new ones, showing a more serious oversupply situation.

Therefore, it is not difficult to see that both the second-hand housing market and the new housing market have fallen into the dilemma of oversupply. What is even more serious is that the mainland's housing resources are no longer simply a problem of imbalance between supply and demand, but an obvious surplus. At the same time, the vast majority of urban households already own their own homes, which further exacerbates the contradiction between supply and demand in the housing market.

Nowadays, the current situation of housing resources in the mainland shows an obvious oversupply trend. Despite this, there are still a large number of people who are facing the dilemma of not having a place to live, and the main reason behind this is that some families hold too large a number of properties. So, what is it that makes these families own so many properties?

An in-depth analysis of the real estate market over the past two decades shows that the trend of house prices has generally shown an upward trend, with the average house price soaring by as much as four times. In some first- and second-tier cities, the increase in housing prices is even more astonishing, reaching a level of more than ten times or even dozens of times. In such a market environment, those who bought real estate early made a lot of money by investing in real estate, and some even achieved financial freedom as a result. Because house prices have been rising for more than two decades, many people have developed the stereotype that house prices will never fall. Therefore, in the perception of the general public, buying real estate seems to be a shortcut to wealth, and the house is therefore endowed with a special meaning as a symbol of wealth.

In the past, many people were keen to buy real estate once they had enough money, and they had a soft spot for real estate investment. Some people have even put forward the assertion that "all the basic needs below the six houses are the basic needs". It can be seen that the wave of speculation in the mainland real estate market has been surging. The public's frenzied investment in real estate has not only led to a steady increase in housing prices, but also led to a large number of idle properties. This is a stark contrast to the current society: on one side there are people who have no housing to live and who are under pressure to buy a house, and on the other side there are mountains of vacant properties.

People invest in real estate for nothing more than to pursue financial gain. However, will house prices soar forever? The answer is clearly not. Just as a towering tree can't touch the sky, so too is an unrealistic fantasy for the infinite rise in housing prices. In the face of the continuous rise in housing prices, high housing prices have become a heavy burden on residents' lives, and they have posed a threat to the healthy development of the economy that cannot be ignored.

Therefore, since September 2016, the state has resolutely launched the curtain of property market regulation. In the past two years, house prices have gradually shown a downward trend, which not only indicates a change in the direction of the market, but also indicates that the future returns on investment properties will become increasingly thin. So, in the next five years, what are the challenges and choices for families with two or more properties?

As we all know, with the continuous evolution of the real estate industry in the future, the mainland's housing resources are bound to become more and more abundant, however, along with it, people's demand for housing will gradually become saturated, which indicates that the future real estate sales market will face huge challenges. For families with more than two properties, they may encounter the following three situations:

1. Excess real estate is difficult to realize. A house, although often seen as a symbol of wealth, can be worth less if it is not sold successfully. Especially in third- and fourth-tier cities, as the supply of housing has far exceeded demand, coupled with the increasing exodus of people, it is difficult to sell real estate.

Second, real estate can turn into a heavy burden. In the past, the cost of owning a property was relatively low, and even if the house was vacant, it did not cause much financial stress. However, with the gradual implementation of policies such as property tax and landlord tax, and even the possible vacancy tax in the future, the cost of holding a property will increase significantly. This is undoubtedly a heavy burden for families with more properties in their hands.

Third, the rental market may face a contraction. With more and more listings and a decreasing population, the outlook for the rental market is not promising. Especially in third- and fourth-tier cities, the rental market is likely to be more depressed due to the exodus of population and the weakening demand for housing purchases. At that time, even if you have a house that you want to rent, it may be difficult to find a suitable tenant.

In summary, there are many challenges ahead for families with multiple properties. Therefore, we need to prepare in advance and reasonably plan our property investment and holding strategies to cope with possible market changes in the future.

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