Real estate in China now has been already pillar industry in China, no matter its development speed or reconstructing range in whole China, both of these factors prove its importance. Certainly, reference to its price, it is also high with almost RMB 10,000 yuan average in metroplis city such as Shanghai, Tianjin, Beijing and even in Shenzhen city of Guangdong Province.
However real estate industry in China also have faced a lot of difficult period when it began to develop since 2000. going through a frog leap development was since 2000 to 2007, by the next year 2008, the real estate industry in China really had to confronted its winter season of development. Certainly, after 2008, the real estate industry reached to its second development era namely around 2009. however, only through 3 years to 2011, in the face of surging housing prices, the state issued a policy of credit restriction and purchase restriction, and the real estate industry fell into a downturn again.
The Real Estate Market Turn Left or Right?
In the decade after 2008, China’s real estate market has experienced a period of boiling years, and its momentum is even greater than that of the previous decade. While this prosperity has injected strong momentum into China’s economy, it has also hidden dangers in the market of real estate for the future.
Ten years ago, China’s economy was still in a high growth stage with demographic dividends and cost advantages, and the private economy also had considerable vitality and competitiveness.
Ten years later, economic growth has slowed down obviously, demographic dividends are disappearing rapidly, high housing prices continue to erode industrial profits, but also let ordinary families bear a heavy burden. The central government is also aware of the adverse effects of high housing prices, and the policy tone gradually shifts to “housing is not used for speculation”.
Not long ago, the central bank lowered its benchmark for the fourth time in a year, releasing more liquidity for small and micro enterprises and private enterprises. However, market confidence was correspondingly low. Financial markets welcomed this policy by killing both stocks and foreign exchange. This means that there may be more relaxed stimulus policies in the follow-up, not even excluding the possibility of moderate deregulation of the property market.
For many new home buyers, this may be a start-up opportunity, and a number of foolish investors may be waiting for the 2008 opportunity to copy the bottom. But it should be noted that compared with 10 years ago, the probability and risk of falling house prices are even greater.