Chinese Homebuyers Losing Their Firepower

iFeng: 中国家庭购房能力逐年减弱 房价不会快速上
“After 40 years of reform and opening up, after 20 years of housing reforms, today's development-led real estate wave is basically slowing down.” On the afternoon of March 5, Yang Xianling, president of the Chain Home Research Institute, bought a house in Beijing in 2018. At the home improvement trend conference and the signing ceremony of the Shell Financial Control Strategic Partnership, the signing ceremony of the rapid increase in domestic house prices and the large-scale development stage has passed. The ability of Chinese families to purchase homes has been weakening year by year, and China’s economic growth and household wealth growth have become worse. The harder it is to support rising house prices.

Since 1998, China's real estate market has been for 20 years. However, its property of “living” has been diluted by the “investment” property in recent years. Real estate has become the favorite investment category of Chinese investors. “The house is used to live, not used for speculation.” After the repositioning, the market has undergone drastic changes in 2017 and the drastic changes in 2018 have continued.
Investing in Chinese real estate for income is also increasing as rents rise faster than home prices. Goodbye 1% yield!
The “China Housing Market Development Monthly Analysis Report” released by the project team of the Institute of Financial Strategy of the Chinese Academy of Social Sciences and the Center for Urban and Competitiveness Research of the Chinese Academy of Social Sciences on March 2 showed that due to short-term and long-term policies, the short-term and short-term policies tighten the financing environment. It is expected that housing prices in first-tier cities such as Beijing and Shanghai will continue their current decline in the short-term, and it is difficult for them to rebound strongly.

However, rent has shown an upward trend. According to the Economic Observer Online reporter, through information on the chain's official website, in April last year, the rent of a 50 square meter apartment in a certain district outside Beijing's East Fourth Ring was about 5,000 yuan per month, and it has now risen to about 6,000 yuan, and it has risen about 20%.

“From the data point of view, housing prices are hard to rise again, and rents have been rising steadily. I believe the overall market space is relatively large, because now the central indicator of the development of the (leasing) market is that the return rate of funds is too low. In fact, Rents are rising every year, with a relatively stable curve, probably about 5% to 8% per year.” Yang Xianren said that there is a large lease gap in the current market, and the rent, inventory, old, broken, small Renovation, supply of bed products and other aspects of a relatively large rental gap. Beijing's rental population is 7.31 million, but the number of leased houses in Beijing is 3 million, a gap of 4.31 million, Shanghai's 5.86 million, and Shenzhen's 2.23 million. This is a very large supply gap. In 2017, the overall turnover of the housing leasing market was 1.3 trillion, and the market will increase to three trillion in the next five years.

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