[Voice of Hope, May 24, 2023](comprehensive report by our reporter Li Hui) Buyers and sellers in China’s real estate market reversed, and many places were surprised to see houses sold with negative down payments. Among them, Luohu District in Shenzhen not only did not need to pay down payment, but also netted 500,000 yuan for decoration. Experts point out that the real estate industry, once the locomotive of China’s economic growth, has now transformed into a real estate crisis, and the unmanageable debt burden has spread to all corners of the entire economy.
According to a comprehensive Lu Media report on the 24th, many social platforms in mainland China have recently appeared to buy a house with a negative down payment. Not only do you not need to pay a down payment, but you can also get a down payment.
In Luohu District, Shenzhen, a set of 5.2 million yuan school district housing can borrow 5.7 million yuan from the bank. Not only does the buyer not need to pay down payment, but he can also get 500,000 yuan as decoration money.
In Banan District, Chongqing, for a hardcover house of 830,000 yuan, the down payment is 40,000 yuan, and the cash back is 50,000 yuan after the loan is released, which is equivalent to the customer can still get the down payment of 10,000 yuan.
The report sparked heated discussions among netizens.
“I guessed the installment down payment, 0 down payment, but I couldn’t guess the negative down payment. This statement also highlights the huge pressure on the real estate seller.” Increased the cost of home buyers. After all, the more loans, the more interest.” “Times change. If this model was in the last round of bull market, it would be very popular, but now there is a high probability of losing money in whatever you do. Under the background, who would want to be this receiver foolishly.” “If you don’t let the surrender be clear, then you will surrender secretly, and the down payment part is the price reduction.” Some people also asked, “How can I pay back the 5.7 million?”
This phenomenon is caused by the continuous decline in the sales price and transaction volume of buildings in the mainland.
On the 24th, Zhao Hongjun, a person from mainland real estate companies, said that the transaction volume in Beijing continued to decline, from 10,003 in February to 5,847 in April. As of May 16, 2,492 were sold, a drop of 50%. %. The transaction unit price in Beijing dropped from 66,300/square meter to 61,600/square meter, a drop of 6%, and the overall decline continued. The number of online customer inquiries has also dropped significantly, with the highest number of 135,000 customer entrustments falling to 46,000 entrustments as of May 15.
Not only that, but the prices of listed houses have also changed significantly. The ratio of the number of houses with reduced prices to the number of houses with increased prices was 7.1:1 as of April, and it should reach a ratio of 11:1 in May.
“Sina Finance” quoted Yang Xianling, former president of Lianjia Research Institute, chief economist of Shell, and founder of Blank Research Institute, as saying on May 24 that the current housing market has changed, and the buyer’s market has come. We need to accept the reality .
According to the report, a “new normal” is forming in the housing transaction market, where more and more houses are being sold, and every time a house is sold, several new listings are added. In many cities, the new inventory in the month was more than twice the amount sold in the month.
Moreover, buyers are more and more aggressive in bargaining, and some of them are directly cutting 30-50% of the price. Almost all house sellers are leaving the market at a loss. In the 300 days, the phenomenon of difficult, slow and unsold houses has become increasingly common. And the customer’s focus has changed from whether it can appreciate to whether it is easy to sell in the future.
Zhao Hongjun pointed out that the main reason for the decline in the volume and price of the property market is that the decline in people’s income has led to a decline in overall consumer confidence, as well as the tide of returning home caused by layoffs.
The Chinese economy was lifted late last year after a severe lockdown. The outside world had high expectations for a strong economic recovery after the epidemic. However, recent economic data show that there is a huge gap between expectations and reality. Ruchir Sharma, chairman of Rockefeller International Group, wrote in the Financial Times on the 24th that since 2008, the CCP has been desperately borrowing money to invest in order to promote economic growth, especially in the real estate industry. Today, the real estate industry, once the locomotive of China’s economic growth, has degenerated into a real estate crisis. The unmanageable debt burden has spread to every corner of the economy.
Now China’s debt service has accounted for one-third of disposable income, excess savings (additional savings during the epidemic) in China is only equivalent to 3% of GDP, far less than 10% in the United States, and because of the shrinking population, China’s growth potential is actually only half of the government’s 5% economic growth target.
Chinese imports, an important indicator of consumer demand, fell 8% in April, and credit growth was only half of expectations last month. Furthermore, youth unemployment has reached 20% and is still climbing.
Shamal said, “A growth model that relies on stimulus and borrowing is always unsustainable, and now it is no longer sustainable.” The Chinese economy has been rotten from the root.
Editor in charge: Lin Li
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