What will families with 2 or more houses face in the future? Cao Dewang's prophecy may be fulfilled

New Talks on Real Estate

2024-06-08 17:44Published in Henan

In today's society, are there many people who lack housing? The answer is undoubtedly yes, and most of them are struggling to buy a property due to financial pressures. So, is the current real estate market still facing a shortage of housing resources? In fact, on the contrary, the property market has shown a trend of surplus, and many residences are idle and unattended.

This phenomenon reflects the complexity and contradiction of the property market: on the one hand, countless people are eager to have a place to live, but they are discouraged by high housing prices; On the other side, a large number of properties stand quietly, but the fate that awaits them is empty and lonely. What is the reason for this situation? One of the biggest drivers behind this is investors who own multiple properties. They buy properties with the intention of reselling them at a high price in the future, while new homes often have a higher market value. As a result, they would rather leave their house unused than renovate it and rent it out, thus missing out on potential benefits. With the booming real estate industry, a large number of new homes are flooding the market every year. With the passage of time, our country's housing resources have gradually evolved from a shortage of supply in the past to an oversupply today.

Of course, in some popular first- and second-tier cities, housing resources are still tight. However, from a national perspective, especially in third- and fourth-tier cities, the phenomenon of housing surplus has become more and more serious. According to data released by the central bank in early 2020, more than 96.86% of urban households in mainland China already own a house, and the average number of housing units per household exceeds 1.5. Even more surprising is that 40% of urban households own two or more properties. This means that the number of properties owned by urban households alone is enough to meet the housing needs of all people in the city, and there is even a surplus.

This situation undoubtedly reveals the deep-seated problems of the current property market: on the one hand, the desire and helplessness of ordinary people for housing, and on the other hand, the manipulation and greed of real estate investors for the market. How to balance the relationship between the two and achieve the healthy development of the property market has become a major problem in front of us.

The house is where people live, but it is also an important commodity in a market economy, and its price always rises and falls according to the balance of supply and demand. So, at a time when housing resources seem to be relatively saturated, why are housing prices still soaring and soaring? In fact, there are multiple factors behind it. First of all, the cost of building houses is rising year by year, which undoubtedly puts a lot of pressure on housing prices. At the same time, investor speculation is also rising, which further contributes to the surge in housing prices.

Looking back on the past, due to the scarcity of housing resources and the acceleration of urbanization, tens of millions of rural people are pouring into cities every year, making housing once a hot and scarce resource, and housing prices are naturally rising.

According to authoritative statistics, by the end of the first quarter of 2024, the average house price is still at a high level of 9,200 yuan / square meter, which is out of reach for many people. What's even more amazing is that in some prosperous first- and second-tier cities, housing prices are as high as tens of thousands or even tens of thousands of square meters, which makes ordinary salaried people look at the building and sigh, and can only put the dream of buying a house on hold temporarily.

However, even in these cities with high housing prices, the vacancy rate remains high, reaching as high as nearly 20% in some cities. Behind this phenomenon is the fact that speculators are hoarding a lot of real estate in the hope of profiteering from rising property prices. In this regard, Cao Dewang, a well-known private entrepreneur, once pointed out that in the current market environment, people should not hold too much real estate, but should sell excess housing in a timely manner, otherwise they may face the dilemma of reducing prices in the future.

In fact, since the second half of 2019, the number of second-hand housing listings in many cities in mainland China has continued to rise. Especially in 2024, this trend is becoming more and more significant, and the number of second-hand housing listings has increased sharply. It is particularly noteworthy that in many third- and fourth-tier cities with serious population outflows, the imbalance between supply and demand in the second-hand housing market has become more and more prominent, and the supply of housing far exceeds the market demand, making it more difficult to sell houses.

What are the challenges for families with two or more properties? Cao Dewang's prediction seems to be gradually becoming a reality.

Real estate investment used to be a profitable business in the eyes of many people, after all, the income is the difference between the selling price and the cost. However, the market seems to be quietly shifting. The volatility of house prices has flattened, while the cost of owning a property is rising. In particular, Hebei, Yunnan and Hunan provinces have taken the lead in implementing the "landlord tax", which has undoubtedly dealt a heavy blow to investors who rely on rental income to support their loans.

Professionals generally believe that the implementation of the landlord tax is not difficult, and with the successful practice of these three provinces, it is likely that the landlord tax will be rolled out quickly across the country in the future. This is undoubtedly a huge challenge for families with multiple properties.

In addition to landlord tax, property tax has also become a hot topic. Many experts are calling for a property tax to be introduced as soon as possible to address high housing prices and taxes. Ren Zeping, a well-known economist, is one of the leading figures, and he is a staunch supporter of the introduction of a property tax, believing that it will not only help stabilize housing prices, but also promote social equity. For young people, reasonable house prices mean they are more likely to achieve their dream of buying a home.

As for the timing of the introduction of the property tax, many experts predict that it will most likely be implemented in the next 5 years. Once the property tax is introduced, families who own multiple properties will have to pay a significant amount of tax each year. What's more noteworthy is that property tax is likely to be levied on a tiered basis, which means that the more properties you hold, the higher the percentage of taxes you will have to pay. This undoubtedly puts more financial pressure on families with multiple properties.

Although various localities have introduced rescue measures, with the gradual implementation of tax policies such as property tax and landlord tax in the future, the profit margins of real estate investment will gradually narrow, and the risk of loss will also rise significantly. In the face of this grim situation, families with two or more properties will undoubtedly face unprecedented challenges in the future.

We must be soberly aware that with the adjustment of tax policies, real estate investment is no longer a sure deal. In the future, families with too many properties will have to face more complex market conditions and higher economic pressures. Therefore, we need to re-examine our investment strategy and rationally plan our asset allocation to deal with possible risks and challenges.

At the same time, we should also realize that the adjustment of tax policy is also an important means for the state to regulate and control the real estate market and promote the steady development of the economy. For individuals and families, this is not only a challenge, but also an opportunity. We can adapt to the new market environment and achieve asset preservation and appreciation by optimizing investment portfolios and reducing investment risks.

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