Since the implementation of the first round of housing reform in China in 1998, the real estate market has developed rapidly, which has brought about a rapid increase in housing prices while improving the living conditions of residents. However, since the second half of 2021, the trend of house price correction has further intensified, and for home buyers, whether the house can appreciate in value has become an important question. Economist Ma Guangyuan believes that the era of real estate as China's best investment product has ended, and housing prices will gradually return to residential properties in the future. So, for a house that is worth 3 million now, what will it be worth in 5 years?
In recent years, China's real estate market has faced a serious imbalance between supply and demand. On the one hand, housing resources are abundant, and the number of stock houses for sale has reached an alarming scale. On the other hand, due to the impact of the epidemic and the impact of factors such as the reduction of people's income, the demand for housing has weakened significantly. In addition, in order to control the rapid housing prices, a number of regulatory policies have been introduced at all levels. Together, these factors have led to a correction trend in the real estate market.
According to the latest data, in the first 11 months of this year, the sales area of commercial housing in the country fell by 23% year-on-year3%, and the sales of commercial housing fell by 26 percent year-on-year6%。During the same period, the average price of second-hand residential housing in key cities fell for nine consecutive months. These data suggest that the real estate market is going through a clear phase of correction. In this context, what is the future development trend of a house that is now worth 3 million?
1. Housing price trends in first-tier cities
At present, most of the 3 million houses in first-tier cities are properties in remote areas or old and dilapidated in the city center. These homes are likely to depreciate rapidly in value over the next 5 years and face the dilemma of not being able to sell. Because the real estate market in first-tier cities has saturated and is no longer as attractive to investment as before. In addition, the trend of population outflow will also lead to a further decline in the demand for home purchases. As a result, the value of these houses is likely to be much lower than the current 3 million.
2. Housing price trends in second- and third-tier cities
Compared with first-tier cities, the real estate market bubble in second- and third-tier cities is relatively small. However, many second- and third-tier cities are facing an outflow of population, which has led to a declining demand for housing. In the next five years, housing prices in second- and third-tier cities will gradually return to residential attributes and be linked to the income of local residents. Therefore, the current 3 million house may not be worth ** in the future.
4. The future development trend of the real estate market
Economist Ma Guangyuan believes that the era of real estate as China's best investment product has ended, and housing prices will gradually return to residential attributes in the future. This means that in the future, the growth of housing prices will be closely related to the growth of residents' incomes. This is an important adjustment for the real estate market, and it also provides a direction for subsequent real estate policy regulation.
Based on the economists' point of view and the analysis of the development of the real estate market, we can conclude that the house now worth 3 million is likely not to appreciate in the next 5 years, but is at risk of depreciation or even not being able to sell. This is because the real estate market has been overloaded, the demand for housing has decreased, and the regulatory policies have been continuously implemented. Therefore, when making investment decisions, buyers should take into account the trend of housing prices and their own economic situation to make a rational choice.
In the process of writing this article, I have gained a deeper understanding of the correction trends in the real estate market. As an important economic field, real estate not only affects the lives of residents, but also plays an important role in the country's economic stability. Through the analysis of the available data and the views of economists, I realize that the trend of housing prices will be closely related to residents' income, and the real estate market will also return to its essential residential attributes. This gave me a deeper thought about the future development of the real estate market and provided me with some guidance for my personal future investment decisions. After all, rational thinking and meticulous analysis are essential abilities for a successful investor.