Author: honey

Introduction:

Recently, Jack Ma said that "8 years later, the cheapest thing in China may be the house", do you believe it? After the property market has loosened up, can you really afford to buy a house?

In 8 years the cheapest thing in China will be a house?

Recently, Jack Ma gave a speech in which he mentioned this sentence, "The cheapest thing in China after 8 years is likely to be a house."

And recently, the property market, which has always been firm, has indeed shown signs of loosening.

For example, Beijing.

According to the Beijing Municipal Commission of Housing and Construction's net signing data: in the first half of April (April 1-April 15), a total of 8,096 units of second-hand houses were signed online in Beijing, a drop of 51.4% from the second half of March, and a drop of 37.4% from the first half of April 2016 year-on-year.

Friends have been secretly happy, applauded to celebrate, many friends are still looking forward to a new round of housing prices, a few hundred or a few thousand per square foot, the best to come to a waist cut!

However, honey sister would like to say, Ma Yun said the house is cheap, that is relative to per capita income, now the Internet is one of the most profitable industry, Ma Yun can ensure that Ali's juniors monthly salary is high enough to crush inflation; and Ma Yun is engaged in the real economy, so people have always been real estate short-selling faction.

So Ma Yun said this, one is the bottom line, the second is a position, he said this is right, if you listen to his words, now sell the house, or expect that the price of housing will be a plunge, want to bottom out, then you are very wrong.

Home prices have plummeted, so you think you can really afford a home?

For example, we are most familiar with Hong Kong.

Historically, there were three rounds of property price collapses in Hong Kong, which had plummeted by 70%, but Hong Kong people could not afford to buy their own homes instead.

What happens after the crash?

Many people analyze the collapse of housing prices, are based on the signs before the collapse to determine the likelihood of the collapse occurred; but little attention to the collapse of housing prices, what happened after the collapse.

The first round was in 1982, some Hong Kong people left Hong Kong after a large number of real estate sales, by the end of the year, Hong Kong property prices fell 60% year-on-year, facing a crash in 1983. We are familiar with the "Emperor" boss Albert Yeung was also bankrupt at this time.

The second round was in 1994 and 1995, when Hong Kong's property prices fell by an average of about 30%, and there was even a slump.

The third round was in 1997, when Hong Kong's property prices fell by half in one year, and after a brief rebound in 1999, they fell continuously for another three years until August 2003. The current round of collapse has been under for 6 years.

So what is the living situation of Hong Kong people now?

At present, in Hong Kong, the per capita living space is only 13.9 sq m; and many low-income people live in ? room is even only 5.7 sq m.

After the plummeting of property prices in Hong Kong, the number of people living in such cramped public housing rental units, which are so narrow that it is difficult to even turn around, has instead increased.

At present, 60% of Hong Kong people cannot afford to buy a commercial property. 45% of citizens are living in public housing and 15% have bought an autonomous house.

So, many friends are wondering why this has happened when Hong Kong has experienced three plunges, the last of which was as long as six years. With such a long period of time, Hong Kong people have obviously had ample time to prepare for buying properties.

The national psychology of buying up rather than buying down

The first is the national "buy up, not buy down" mentality.

A lot of people facing the decline, are so think, hand so little money, naturally buy the cheaper the better, always feel that the prices will continue to fall, so continue to wait; have been waiting until the prices rise again, only to feel regret, but still have to wait, and hope to wait until the day when the prices come down again. Despite repeated several times, but still do not learn a lesson.

Not to mention houses. Isn't that how many stockholders get trapped?

Apart from the psychological factor, I am afraid that the deeper level is the overall contraction of the economy and the overall regression of the country as reflected in the plunge in property prices.

Under such circumstances, banks are bound to tighten their own purse strings.

In order to reduce their own risk and the incidence of bad debt, loans will be controlled quite tightly, either by raising interest rates or down payment ratios.

Therefore, when the time comes, the down payment may empty your family's bottom line, and even have to borrow heavily, and the burden of a higher mortgage every month, will you be willing to buy then?

Even if you are willing to buy it, you may not be able to afford it.

The overall economy is bad, all companies will have poor earnings or even losses, layoffs and pay cuts are bound to happen. When the time comes, the wages are less, the job is gone, you can not afford to feed yourself is not easy to say, but also to consider buying a house?

What's more, in a situation where the city's development shows no progress or even regression, and no investment potential and development prospects can be seen, it's too late for people to scramble to sell their properties, so will they still think about getting on the train again?

So, you don't buy a house when it goes down, especially if you do wait until the day it crashes, you'll just be glad you didn't buy a house instead of rushing to buy one!

Three major risks in real estate lending

On April 21, at the CBRC's first-quarter economic and financial situation analysis meeting, Guo Shuqing mentioned three risks in the area of real estate lending.

One is a bank that lends a lot of money.

The share of real estate-related loans (including real estate as collateral and security) has exceeded one-third of (total loans), and the share of real estate-related loans of individual banks has even exceeded 50%, which is potentially more risky.

The second is the surge of highly leveraged home loan residents.

Be wary of the rising trend in the number of people taking out highly leveraged home loans; the proportion of highly leveraged home buyers has risen and the pressure to repay their loans has increased significantly.

As of the end of 2016, the banking sector's loan-to-value ratio (LTV, the ratio of the loan amount to the value of the collateral) exceeded 70.1 TP3T of personal housing loans, the share of which has reached 9.71 TP3T, a metric that has increased by 6.7 percentage points from the year-on-year level.

Third, highly leveraged, high-priced real estate companies that supply land.

From the perspective of property development loans, with the tightening of the financing environment, the risk of capital chain breakage is higher for real estate enterprises with high leverage and high land supply in the previous period.

Why did Chairman Guo emphasize these three groups?

Because once housing prices fall, the first to bear the brunt of the danger is them; and once housing prices plummet, these people will inevitably be the first to die on the beach, and then is the entire economy out of fire and the decline of the country.

Having mentioned Hong Kong earlier, let us now look at Japan.

In 1991, Tokyo housing prices plummeted by 65% in 3 months. overnight, millionaires who had purchased real estate became multi-millionaires, and there was a concentration of suicides and bankruptcies.

Before the collapse of housing prices, the Japanese people mostly loans to buy a house, many only work on the back of 5, 60 million yen debt, after the collapse of housing prices, after they had to borrow loan sharks to repay the bank to new debt for old debt, the rest of their lives spent in debt repayment.

Businesses are going bankrupt in droves, with the number of bank and real estate company bankruptcies exceeding 3,000. Japan is experiencing unprecedented employment pressure, with countless people facing unemployment, and the few jobs that are available have very low wages and long working hours.

The yen also began to plummet, falling even more than 30% against the dollar in 1991, beginning a 20-year-long depreciation that hasn't slowed down yet.

And, the situation in China is probably even more dangerous than in Japan!

Back then, although the property market bubble in Japan burst and the economy stagnated, there was at least enough capital to support it, whereas if our bubble bursts, we do not even have the capital to support it!

In 1990, Japan's per capita GDP had already reached $25,000, which was higher than that of the U.S. Today, 27 years later, our per capita GDP is less than $20,000 even in the North.

The bubble is so big, will it burst?

Now, do you understand Chairman Kwok's deeper meaning?

The government does not want housing prices to soar, but even more do not want housing prices to plummet, for one thing, we still have to count on land finance to earn money, and secondly, the consequences of a plunge in housing prices is something we can not afford.

The people also do not want a big drop in housing prices, especially those who have a house in hand, do not look at the present everyone is waving the flag and shouting to the government to reduce housing prices, housing prices really fell, and then there should be a large number of people ran out to let the government rescue the market.

Is Hong Kong not a lesson from the past?

In order to lower property prices, Tung Chee-hwa launched the "85,000 flats building program". The huge supply of flats has caused the property prices in Hong Kong to fall continuously. For a while, Hong Kong was in a state of public discontent.

Therefore, the current round of regulatory policies will strive to be prudent! If our real estate bubble bursts immediately, it will also bring about a number of derivative problems.

So what do you do when the bubble is so big and you don't want to burst it with a single blow?

Locked up mobility.

The previous series of regulatory moves, including the introduction of sales restriction and the restriction of trading only after two or three years, are meant to close the door and reduce market liquidity, making it difficult for people to sell the houses in their hands in the short term.

And now, with all the risk prevention warnings from the State and the chord revealed by Chairman Guo, it is about raising the threshold to control the issuance of mortgage loans by banks and tightening the preferential interest rates to raise the cost of buying a home, thus reducing the number of home transactions.

It's like building a walled city, where those inside don't want to come out right away and those outside don't want to go in right away.

You can't sell it even if the prices go up

So, for those who want to invest, Honey advises you to be cautious now.

Don't say that the cost of buying a home is getting higher and harder to qualify for; even if you do buy a home, even if the prices go up, it has nothing to do with you because you can't sell it.

You don't live on your own, you can't get a high price for renting, and the rent you collect isn't even close to the monthly loan you pay, so what kind of investment do you think this is?

The people who just need, honey feel that there is a period of time in the future you can comfortably choose a house to look at the house, wait until the price level back to the right, you can go out and buy a house, of course, provided that you have to have the qualification to buy a house.

Don't hold the mentality of waiting for the price of housing to plummet and then take the plunge, remember that you buy a house is for self-occupation not to make money, happiness is more important than anything else.

In fact, people of any age will think that housing prices are too high and expect them to fall; look at this 1988 newspaper.

Thirty years ago, the people look at the building and sigh. Now, the people still look at the buildings and sigh.