The Chinese authorities recently introduced a series of housing market rescue policies. Despite these so-called “epic-level” market-stimulating measures, public opinion indicates that people still cannot afford to buy homes. Experts question whether the drastic actions taken by the authorities can shift the housing market from the ICU to a KTV, a metaphorical comparison suggesting a move from intensive care to a karaoke entertainment setting.
On May 17, the Chinese authorities rolled out four major measures to boost the market, including reducing down payments, lowering interest rates on housing provident fund loans, eliminating the lower limit on commercial loan rates, and having state-owned entities repurchase houses to adjust the supply.
The public has displayed contrasting reactions to the authorities’ housing market favorability policies. Online users mockingly remark that while the government provides all kinds of benefits except for lowering housing prices, residents only offer support that does not involve purchasing.
People believe that the direction guided by the government’s latest policies is not about reducing costs for consumers but rather increasing leverage for buyers.
Despite a general plunge in housing prices across mainland China in the past two years, with the market on the verge of collapse, current prices are still too high for ordinary citizens to afford.
Renowned financial influencer Wang Siyuan commented on the latest market rescue policies, stating that the authorities are no longer incrementally introducing measures but questioning whether these drastic actions can revive the housing market that is currently in critical condition.
The current issue in China’s real estate market, according to Wang Siyuan, is that those who have money do not lack houses, while those in need of houses lack money. Even with significant reductions in mortgage rates by banks, the outcome remains uncertain because people lack the stability of a job for the next 30 years and sufficient income to cover mortgage payments, something many do not have confidence in. Without improvements in employment and income, expecting a rapid rebound in housing demand is unrealistic.
To address the current supply-demand situation in the real estate market and see a shift, more robust policy efforts are required.
On May 23, Tianjin internet writer Xu Hongsen highlighted a new housing complex near Dongli Lake in Tianjin’s Dongli District that saw a 50% drop in prices since its opening this year. He warned against believing claims that housing prices will rebound or rise, deeming such assertions entirely implausible.
Xu Hongsen attributed the sharp decline in housing prices to the rampant state of China’s real estate market, with many areas in Tianjin experiencing drops of 50% to 60%, a trend he believes will continue. He advised people to be cautious, as investing in property during the current challenging economic environment is risky, urging them to focus on self-investment instead.
Adding to the discussion, a netizen from Guangdong known as “Bingshuang Yanxia” predicted that the housing prices in Hegang serve as a vivid portrayal of what most cities’ future housing prices might look like, suggesting that one could buy a property for as little as 50,000 yuan in the future.
Speaking as a director of a company in Dongguan, Guangdong, “Maomao” recounted the harsh reality of the housing market in Shenzhen in 2024. She revealed that prices had plummeted from 60,000 yuan per square meter to 35,000 yuan, causing her cousin to lose all his savings in just three years, falling victim to the volatile market.
In 2018, a wave of property fever swept across Shenzhen, with her cousin investing in a 70-square-meter unit in Pinghu for 3.2 million yuan, taking a 1 million yuan loan from the bank for 30 years with a monthly repayment of about 7,000 yuan. Despite his family’s concerns about the high price per square meter, her cousin believed that prices would continue to rise, viewing property investment as a secure and profitable venture.
Unfortunately, the COVID-19 pandemic significantly impacted the industrial area where her cousin’s restaurant was located, causing business to dwindle rapidly. Three months later, unable to sustain the business, her cousin had to sell it off.
The loss of their jobs left her cousin and his wife in a devastating situation, without any income to meet the monthly mortgage payments. At 36 years old, he struggled to find new employment opportunities. Their failed investment in real estate served as a brutal lesson, shattering their once stable life. The sudden turn of events led to anxiety, fear, and health issues for her cousin. The reality of the housing market crash was something they had never imagined, causing regret and distress on a daily basis.