I'm updating last night's post. I said that the trend of Hangzhou before 2019 is not visible, and my friends from Trend Animals sent me more detailed data. To be precise, the current housing prices in Hangzhou have fallen to around May 2017.
This is the pure housing price index. If you follow the calculation principles I used last night and include the mortgage interest you have paid since buying the house and the principal you have invested (the opportunity cost is calculated based on the risk-free government bond interest rate), I think there is not much profit to be made if you bought it in 2015-2016.
Then someone asked me about trusts. The regulatory authorities have long stipulated that such products are prohibited from being publicly promoted, so I would not recommend them. Two years ago, a buddy of mine who worked in an institution introduced me to the product he was responsible for at the time. It was locked for 2 years and had a return of 6.4%. If you buy 1,000, it will be 6.7%. I made a comprehensive judgment and felt that the cost performance was not bad. At that time, my mortgage interest rate was 4.1%, and the wealth management there had a 6.7%, with a 2.6% interest rate difference. This arbitrage could be done.
Now that the two-year loan has expired, the overall social situation is very different from two years ago. The risks of the underlying assets have begun to increase. If the same product is renewed upon expiration, the yield is only 4.4-4.5%, and the interest rate difference with the mortgage is less than 1%. It is not worth doing this, so I am considering paying off the loan in advance. If I need money later, I can borrow from the bank. Now banks are begging high-quality customers for loans, and the interest rate is even lower.
Let me think about it. There are also users asking about defaulting on home payments. I have seen many people sharing their experiences on social media. In fact, the regular media have also reported on it. The Economic Observer recently had an article titled "Defaulting Home Loan Payments Are Coldly Treated". I have put a hyperlink. If you are interested, click on it and take a look.
《Defaulting on mortgage payments is treated coldly》
The number of defaulted mortgages has increased several times this year, and banks are now in a passive position. If all strict enforcement is carried out, it will lead to the impact of foreclosure auctions on the market, causing more defaults. Therefore, they will now take the initiative to appease high-risk customers, proactively lower interest rates within the policy scope, and make concessions to those who really default on mortgages, allowing the other party to stop paying for 6-12 months, or extend the loan period, or even allow only interest payments for a period of time. In short, as long as the other party is willing to pay, everything can be negotiated.
After reading the report, my biggest feeling is that I have become cautious about the prospects of bank stocks. This is only the third year of the correction. If the same degree of correction continues for another three years, I am somewhat worried about whether the banks will be able to resolve the corresponding bad debts.
……
Many netizens left messages asking me what I think about the future housing market?
I just look at the data month by month, and if there is no sign of stabilization, I will follow the trend. My family buys houses for living and self-use, and has never had the slightest thought of investment, so we are indifferent to the rise and fall. Because China's new population has clearly turned downward since 2017, the long-term cost-effectiveness of real estate as an investment product is destined to continue to decline. This has been repeated at least 5 times in the evening report.
So when I calculated my own real estate profit and loss yesterday, I was calm, just like I was calculating other people's money, I don't care about it. Personally, I hope that housing prices will continue to fall, or at least stop rising, because that will greatly ease the wealth divide in our society and reduce the anxiety of adults.
In the 1990s, although everyone was not rich, the pace of life was slow and comfortable, because the gap between the rich and the poor was small at that time, and there was no resentment caused by mutual comparison. Since the millennium, two types of people have embarked on the fast track to wealth. One type is the brave people who buy houses, and the other type is the elites who join the Internet startup. For a while, you will find that some of your peers are already in a different world from you after 10 years. This huge impact has caused a lot of social anxiety. Everyone is afraid that they will be left behind by their peers and become a loser, so they all work hard to roll inward and look for opportunities to leverage and overtake.
Now, in the past three years, Chinese stocks have fallen, the myth of Internet wealth creation has been forgotten for a long time, and housing prices have also fallen back for three years. You find that the peers who left you behind 10 years ago are back. Now everyone doesn't have to worry anymore. Who can leave who behind just by working part-time to earn a salary?
In this era of slowdown, everyone has slowed down. Perhaps we can have more time to enjoy life and rediscover our own lives. This is not a bad thing for our generation.
