By the end of the year, the property market in many regions has shown an increasing trend in both volume and price. Faced with the rising housing prices, home buyers are becoming increasingly anxious: will there be an end to this price hike?
Whether housing prices rise or fall depends on a number of factors. In China, relevant policies play a crucial role as indicators. However, price fluctuations ultimately result from the game between supply and demand. Therefore, observing the real supply and demand relationship behind high-priced houses will allow us to more rationally view the current madness in the property market.
Some 30,000 yuan per square meter housing sales show signs of fatigue. From lottery-based house purchases to first-come-first-served, the sales of Beijing's high-priced houses priced at 30,000 yuan have undergone dramatic changes. In early December, a housing development near the Second Ring Road opened for sale via a lottery system, with average prices ranging from 30,000 to 35,000 yuan per square meter. Previously, the developer had promoted features such as park views and a green coverage rate of 68%. Online inquiries revealed that 546 people participated in the lottery, all of whom were successful. Media reports stated that over 700 units were sold. When the reporter called to inquire whether any units were still available for purchase and if participation in the lottery was still necessary, the salesperson replied confidently: "Just come directly to buy, no need for another lottery."
Similarly, the reporter received multiple notifications about a particular housing development recently. Due to the large unit sizes, the average price rose to around 30,000 yuan, yet after selling for more than three months, the development still claimed to have units available. In reality, some of these seemingly hot-selling 30,000 yuan per square meter houses may not be as optimistic as they appear. At the end of November, a high-end development near the Fourth Ring Road released its properties. By employing deceptive card-opening discounts and delaying price announcements, the developer managed to attract 788 people to participate in the lottery for over 100 units. A supply-demand ratio of nearly 1:8 seemed to indicate strong demand.
However, the truth is different. Among those participating in the lottery, many families opened multiple accounts using methods like DNF (an online game) cheats to increase their chances of winning, which if excluded, would estimate the real number of potential buyers to be around four to five hundred, not including those who did not agree with the final price. This developer confidently declared that the second phase would open at 35,000 yuan and eventually reach 40,000 yuan. It’s unclear where the confidence for such bold claims comes from.
The supply-demand relationship behind these "30,000 yuan houses" reveals at least three issues: First, high housing prices have lost much of their appeal to some speculative investors. It’s well known that speculators who bought properties two or three years ago can now make three to four times the profit. However, purchasing a "30,000 yuan house" today, even if it rises to 40,000 yuan, only yields about 30% profit. This explains why some speculative groups have chosen to leave first-tier cities and focus on second and third-tier cities.
Second, part of the rigid demand has been scared off by high housing prices. High-priced houses in Beijing typically correspond to large units over 160 square meters, costing at least 5 million to 6 million yuan per set. With the current income levels, how many people can afford and are willing to bear such high prices?
Third, some developments may find themselves in awkward sales situations due to blindly raising prices. Not all high-priced houses in Beijing are difficult to sell. When the reporter inquired about two high-end developments near parks in Chaoyang District, both were said to have sold out shortly after opening. Some developments raise prices under the guise of CBD eastward expansion or park-side luxury residences but fail to gain much recognition due to poor locations or incomplete配套设施. This could lead to sales difficulties.
The deadlock in the property market requires policy intervention. Expecting developers to lower prices and promote sales might be hard to achieve in the short term. After the financial crisis, to promote the development of China's real estate industry, the government introduced a series of preferential policies. Under this backdrop, many real estate companies raised funds, issued bonds, and saw a surge in sales in the first half of the year, greatly easing financial pressures. Thus, developers can choose not to lower prices and sell slowly, leading to a sales deadlock.
However, for the entire real estate industry and national economic growth, this is not a good sign. Imagine, some small and medium-sized companies with insufficient capital, if they don't quickly accelerate sales to recover funds, how will they secure new investments next year? Some land kings, seeing that similar developments in the same area aren't selling well, may become more cautious, reducing their enthusiasm for development. For the government, if real estate investment cannot maintain high growth, how will the pressure on GDP growth be alleviated?
With housing prices at a stalemate, relying solely on the self-adjustment of buyers and sellers can resolve the deadlock, but this process will undoubtedly be long. If we want to shorten this process, the direction of real estate development policies should become clearer. Recently, Premier Wen Jiabao pointed out the need to curb speculative home buying. If the state can quickly introduce relevant specific supporting policies, it can increase the 'short' forces in the property market, breaking the single-minded thinking of developers, prompting them to rationally price and sell, lowering the overheated housing prices, and gradually releasing transaction volumes. Related theme articles: BMW Cheats
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