Battle Looms: How Can Average People Protect Their Wealth? Clear Advice Here
The vast majority of Chinese people's wealth is tied up in real estate.
However, in the past two years, the real estate market has been visibly struggling.
Almost everyone is concerned about real estate: those with homes worry about falling prices, while those without worry about rising prices.
In today's article, we will discuss the core essence of real estate.
We recommend that everyone reads it, likes it, shares it, and saves it, because there is a very clear conclusion and suggestion at the end.
As it involves buying and selling property, it is no exaggeration to say that this article is worth a million dollars.
Over the past 20 years, whenever the economy has encountered difficulties, we have chosen to stimulate the real estate market, and then the rhythm of continuing to play music and dance has followed.
To be honest, real estate has indeed made a significant contribution to China's economic development as a pillar industry over the past 20 years, and we should not deny this.
However, this can only be considered a thing of the past.
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How does real estate stimulate the economy?
It's actually quite simple.
After an economic crisis, the real estate market is ignited, followed by rising housing prices and a surge of residents rushing into the market to buy homes, making the real estate market booming.
This not only solves social employment issues but also drives hundreds of upstream and downstream industries.
There are more than 10 million people directly related to the real estate industry in China, and related industries such as the steel and cement industry, home appliances and furniture industry, construction materials industry, etc., are also stimulated.
After buying a house, you need to decorate, so decoration companies also make money.
At the same time, land transfer fees are an important source of tax revenue for local governments.
Once local governments get the money, they can pay civil servants' salaries and invest in local infrastructure construction, which in turn increases employment and consumption, thus revitalizing the overall economy.
Over the past 20 years, we have basically done this.
The rapid development of China's economy is inseparable from real estate, and real estate is absolutely one of the pillar industries and economic development engines in China over the past 20 years.
However, there are definitely problems with this.
Real estate is not omnipotent.
Every time the economy encounters difficulties, we stimulate real estate, which leads to higher and higher housing prices and an overall oversupply in the real estate market.
Take my hometown as an example, a small county town, where the price of a decent house now starts at 1 million yuan and can reach up to 1.2 million yuan.
After buying and renovating, it can cost up to 1.5 million yuan, which is quite outrageous.
If you buy a house now, the down payment would be around 400,000 yuan, with a monthly mortgage payment of about 5,000 yuan, and you have to pay it for several decades.
However, the average salary in my hometown is less than 4,000 yuan, which is very unfair to young people who have just entered society.
Because they were born a few years later, they might have to spend their entire lives' earnings on a house, which is unfair.
Now, young people are not foolish.
Since housing prices are so high, they might as well just lie down and not buy a house, not get married, and not have children.
It's quite nice to be free and unfettered.
Because of high housing prices, they can't afford to get married, and because of high housing prices, they directly lie down.
More and more people are choosing this path.
The direct result of young people not getting married and not having children is a cliff-like decline in the birth rate.
In 2016, the birth population in China was 18.832 million people, but by last year, 2023, it had dropped directly to 9.02 million people, with the birth rate halved.
There are many reasons for this, but high housing prices and the great pressure on young people's lives are definitely one of the main factors.
Many people have not yet realized the horror of this data.
Let's not talk about the distant future, but this data has directly led to many obstetricians and gynecologists in hospitals being almost unemployed.
At least for now, many hospitals' obstetrics and gynecology departments are no longer recruiting externally.
Then comes kindergartens.
You can tell by the birth population data.
With half the birth population, who needs so many kindergartens?
The wave of kindergarten closures has already begun.
Many kindergartens in Beijing used to have very high thresholds, but in the past two years, I have seen many kindergartens that have almost no threshold.
They no longer require Beijing household registration, residence permits, or employment certificates.
You can enroll as long as you come, because children are now too scarce.
After kindergarten, it's definitely elementary school, followed by middle school and even university.
Therefore, it makes sense that teachers are becoming a high-risk profession.
As the number of students decreases, there will definitely be a group of teachers who will be unemployed in the future.
So, the decline in the birth rate is actually a very bad thing.
It will bring a series of adverse chain reactions.
To solve this problem, we need to reduce the pressure on young people's lives, and housing prices are the first to be addressed.
At least housing prices should not soar anymore.
On the other hand, in the current environment, the world economy is in a recession, and the development dividends in many fields have already ended, such as the typical internet industry.
In the past, the internet was very profitable, and there was a lot of demand in the market that could be developed.
But today, when we look at it, the areas that can be developed have basically been developed, and the competition is very fierce.
For example, in the past, many people only knew Taobao for online shopping, but later, JD.com, Pinduoduo, and now live broadcast shopping have all risen, making Taobao's life more and more difficult.
In the past, the rapid development of the internet required a lot of programmers, so programmers' salaries were very high in the past.
But now, when we look at it, there are not so many projects that need to be developed, and internet companies are becoming more and more competitive, and they need to reduce costs and increase efficiency.
Naturally, many programmers are also unemployed.
What I want to say is that over the past 20 years, with the rapid growth of China's economy, it was no problem for housing prices to soar all the way, because as housing prices rose, as long as the economy was still developing rapidly, everyone's wages were also rising, then high housing prices were not a problem, and they would slowly be digested.
I bought a house more than ten years ago, and at that time, I thought the monthly payment of 1,500 yuan was very high, but looking back today, a monthly payment of 1,500 yuan is ridiculously low, which is the result of rapid economic growth.
But once the high growth of the economy ends, and your salary doesn't increase for 20 years, what should you do?
Looking at the current situation of young people, including middle-aged people, let alone promotion and salary increase, it's not bad to find a job and not be unemployed, but you have to repay the mortgage for 30 years, and you can't miss a penny every month.
What should you do at this time?
Today, my salary is 5,000 yuan, and the mortgage is 5,000 yuan.
In a dozen years, I don't know if my salary will be 5,000 yuan, or even if I can keep my job, but the mortgage is still 5,000 yuan, and then the pressure is too great.
Many people are still foolishly waiting for housing prices to soar, and buying a house to get rich, which is impossible.
This opportunity has long passed.
Two years ago, housing prices had already started to fall, and generally fell by 30% or even more.
So many real estate companies have problems, and so many unemployed unfinished buildings, are we foolish?
Why don't we stimulate it?
If we stimulate it, the housing price rises, and all the problems are solved.
No one is foolish, because it can't be stimulated.
Without the support of high economic growth, the higher you stimulate, the faster you die, and the more miserable you die.
Take my hometown as an example, a house is 1.2 million yuan, and everyone can barely get on the bus, but if it doubles to 2.4 million yuan, what do you let those young people with a monthly salary of 4,000 yuan buy a house with, and there is no hope of seeing a salary increase, and even have to face unemployment cautiously, what do you let these people add leverage with.
In the past, you could certainly add leverage, because according to the logic of our high growth before, your salary of 4,000 yuan would become 8,000 yuan, and then become 12,000 yuan.
At this time, a house of 1.2 million yuan could certainly rise to 2.4 million yuan.
Because even so, everyone can still afford it, and dare to take out loans and add leverage.
Now the logic is completely reversed.
In the economic downturn, I believe there is no need to say more, all walks of life, everyone should have a deep understanding.
So this is the core essence.
At this time, the soaring housing prices, not only does it have no significance, but it will also accelerate the collapse of the real estate market.
The most critical point is coming, what if housing prices don't rise, and in the past two years, we can see with our own eyes that they are going down.
What is the situation?
Because in the past, in addition to living, the reason why housing prices soared is that real estate has financial attributes.
What is financial attributes?
In the past, many people bought houses not to live in, nor to rent out for rent, but to wait for housing prices to soar and then sell them to make a difference.
This is the logic of many people buying houses in the past 20 years.
Indeed, many people have become rich by speculating on houses in the past, because housing prices have been rising, as long as you continue to add leverage, then you will really make a lot of money, but the problem is that once housing prices do not rise, what should you do?
If housing prices do not rise, real estate has no financial attributes, and at this time you buy a house to make a difference, make a difference, what difference can you make.
You say you are a hard need, you have to get married next month and must have a place to live, no problem, you can buy at will, but don't forget, our real estate has long been over-supplied, for those who buy a large number of houses for investment, this is disastrous.
Because if housing prices do not rise, then I spend millions of loans to buy a house and I am not ready to live, then it can only be used for rent, but no matter which city you calculate, our general rental return rate is only less than 2%, that is to say, you spend money to buy a house to collect rent, it is not as much as you put your money in the bank to get interest.
The problem is here, since it is like this, why don't I sell the house and put it in the bank, and the money in the bank can be withdrawn at any time, but selling a house, everyone who has sold a house in recent years should know how difficult it is to sell a house, if you are in a hurry to use money, can your house be cashed at any time, it is impossible.
Therefore, a house without financial attributes will definitely return to its value, housing prices do not rise, the rental return rate is so low, then for investors, of course, choose to sell the house, the problem is that there are so many people to buy.
In the past, developers sold houses, speculators and hard needs bought houses together, now developers and speculators sell houses together, and the hard needs that can get on the bus are pitiful, so your high premium house of course can't be sold, what to do if it can't be sold, can only be sold at a lower price.
So everyone, don't listen to the hype of all kinds of intermediaries and speculators, our policy has long been to live in houses and not to speculate, and houses that have lost their financial attributes must only return to their value.
To what extent, to the extent that the rental return rate of real estate is at least higher than the bank interest, between 3% and 5% or even higher, and real estate can only be some real estate that is valuable.The reason lies in the fact that when you take out a mortgage to buy a house, there is an interest cost involved, and the liquidity of your property can be an issue.
The money I deposit in the bank is readily available whenever I need it.
If I want to use money with my house, I would have to sell it.
However, with so many houses on the market and the demand for housing decreasing, whether you can sell it or not becomes a question.
Given this situation, the reason for me to buy a house must be that the rental yield should be at least higher, or even much higher, than the interest I would earn in the bank.
Otherwise, why not just deposit the money in the bank?