Under the collapse of real estate, there may not be such a pessimistic economy as we see!
In fact, in recent years, more friends around me have been talking about the decline in housing prices caused by the collapse of domestic real estate, which has led to the depression of dozens of industries, income decline, and consumption downgrade. Many people are complaining, and many people are also discussing whether there are still opportunities for real estate in the future! ?
In fact, the collapse of the real estate bubble has indeed brought a huge impact on the current economy. After all, half of our domestic residents' assets were in real estate before. The collapse of real estate has indeed caused most of the property to shrink, leading to depression in many industries, income reduction, and consumption downgrade. Even foreign media took the opportunity to short the Chinese economy, believing that the Chinese economy has entered a recession. This has also caused many domestic financial and financial bloggers and participants to be nervous, or follow this direction to pessimistically agree, but I don’t think this is the case.
First of all, real estate has been the best and most extensive investment in domestic wealth creation in the past 10-15 years. This result has put it in a high-risk stage. The essence of a house is to solve the housing problem of residents, whether it is affordable housing or improved housing. However, due to the previous population growth and demographic dividend, coupled with the influence of the country's economic development policies, the effect of real estate getting rich quickly is too high, and too many people follow suit, making the original real estate as a foundation an investment product, and even deriving many financial derivatives, which greatly increases the risk of real estate.
If you don't understand the risks of real estate, you can regard it as a risky investment in the stock market or even the crypto market. If you lose money in this field, more people complain about this industry, but in fact, they also acquiesce in their hearts, because when you step into this field, you actually subconsciously know that you will lose money, but people's greed acquiesces to this loss or ignores the risk of this loss. The same is true for real estate investment.
From another perspective, the real estate bubble burst. It did bring an impact on the economy, but this impact was not as pessimistic as foreign media or some people thought.
Under the real estate bubble, although many of us have damaged assets and the economy has also been damaged to a certain extent, many industries have been depressed, income has been reduced, and even consumption has been downgraded, but you have to know that you can still consume and still have a certain consumption capacity.
There is no harm without comparison - Japan, once the second largest economy.
90 years ago, Japan experienced a post-war economic miracle, and the national economy developed rapidly, whether in real estate, manufacturing or finance, especially in Tokyo. The housing prices were not limited, which led to sky-high real estate prices in Tokyo, which were basically unaffordable for ordinary people. After the 1990s, the real estate bubble burst, causing a serious economic decline in the entire Japanese economy, and even the "Heisei Great Depression". If you don't know the specific situation, you can go to the relevant information left at that time to verify.
It was under this great depression that the "homebody" culture that later prevailed in Japan and has continued to this day was derived in this way, because the consumption capacity was greatly reduced, and there was no consumption capacity, and employment opportunities were reduced, so they could only stay at home to reduce their expenses. Therefore, in comparison, although our consumption has been downgraded, we still have a certain ability to consume life security consumption and normal entertainment consumption in addition to large-scale consumption. This is the gap.
Did China anticipate the harm caused by the rapid development of real estate? The answer is yes.
From 2009 to 2011, deleveraging began.
Starting from 2009, some first-tier cities in China began to restrict purchases. At that time, the down payment ratio for the second set of Shanghai had reached 70%, and later more and more first-tier cities began to restrict purchases. Although Hangzhou later began to cancel the purchase restrictions, it did not cancel the price limit, and the price of new houses was suppressed and could not be sold at too high a price.
Why do this? It is because we want to suppress the leader to prevent the demonstration effect of rising real estate prices across Japan caused by the "runaway" housing prices in Tokyo, Japan.
Under the premise of suppressing the leader, the general housing prices are indeed not too outrageous. In other words, although the housing prices are outrageous and exceed many people's expectations, after the real estate bubble, we did not suffer as much damage as Japan, which is actually enough to be thankful. You know, our land area and population are how many times that of Japan? Once such a huge bubble bursts, the negative effects will be smaller than those of Japan at the beginning, which is already a very good defensive measure.
Similarly, the United States also had a "subprime mortgage crisis" due to real estate in 2007-2009. You may say that the United States solved the problem later and did not decline. But you have to know how powerful the United States was in 2007, and it was even stronger before 2007, but what about now? Comparing the past as the world's number one economy with the present, even Americans themselves have to admit that the former "empire" is in decline!
Is there still a chance for real estate?
I believe that many senior bigwigs in real estate will not give you an accurate answer to this. Without population growth and demographic dividends, and without the support of national policies, the current real estate is already a policy market. Under this state, the profit and risk of real estate investment are not proportional.
In theory, any investment that relies on policies to achieve profit effects is considered a high-quality investment.
In real estate, examples that can be used are school district housing and demolition housing. Many people buy school district housing and demolition housing just to enjoy the policy dividends. However, little do people know that school district housing in many areas may depreciate rapidly under the influence of a certain policy. The cancellation of school district housing or the cancellation of the school district system will directly lead to a sharp drop in housing prices. This is even more true for demolition housing.
Therefore, the risk of such investment relying on policies will be very high, because it is difficult to guarantee that you can interpret and get the policy trend first-hand, which will be the pain point of most people. Of course, a small number of people can get first-hand information and may still make a profit. But this also shows that the threshold for real estate investment is getting higher and higher.
Finally, for real estate, since the current bubble burst has become an established fact, we should not expect a bubble with greater risks to be pulled up again, so we must make reasonable and rational judgments on real estate purchases or investments. At the same time, we don’t have to be overly pessimistic about the current situation. The outbreak of a crisis also indicates that there is one less potential threat in the future.
