In recent years, the Chinese real estate market has been continuously sluggish, with housing prices plummeting relentlessly. A woman from Shandong province sold her house in Hangzhou for 1.8 million yuan and then bought it back for 1.2 million yuan, sparking a heated debate. Many netizens believe she made a huge loss, speculating that even after a year the property might not fetch more than 500,000 yuan.
The woman, Liu Yun, shared her recent experience of buying a house with excitement. “In the first half of this year, I bought back the ‘old rundown’ house I sold six years ago and made a clean profit of 600,000 yuan!”
According to Qianjiang Evening News, in 2018, Liu Yun sold a “old rundown” apartment in Jiahui Mansion in the city center of Hangzhou to return to her hometown for development.
The apartment, measuring just 51 square meters, although equipped with an elevator, was a top-floor unit and hence not highly priced at the time, fetching around 1.8 million yuan.
After returning to her hometown, Liu Yun couldn’t shake off the memories of the city where she had once struggled. In the first half of this year, she saw a property similar in size to her previous house advertised for only 1.25 million yuan in the social media circle of the intermediary who had helped her sell her house.
Excited about the coincidence, Liu Yun immediately returned to Hangzhou to inspect the property. She was shocked upon arrival. “How could such a coincidence happen? The house I wanted to see turned out to be in the same building as the one I sold years ago!”
Although both properties were 51 square meters, the new house was on the 16th floor, a better location than the previous unit. After inspecting the house, Liu Yun immediately made an offer and eventually sealed the deal for 1.2 million yuan.
She mentioned that another reason for her purchase was that the property came with a lease, generating a monthly rent of 3,500 yuan, resulting in an annual rental yield of 3.5%.
Liu Yun stated that compared to deposit interest rates, such a return rate was quite good.
The news triggered discussions among numerous netizens:
“She made a big loss. She didn’t expect that buying it back for 1.2 million yuan, it might not even be worth 500,000 yuan in a year!”
“I sold my house in a first-tier city for 2.2 million yuan in 2021, and now I don’t even want to buy it back for 1.03 million yuan.”
“The house I sold for 1.75 million yuan in 2021, can now be bought back for only 900,000 yuan.”
“A friend of mine lives in a small community on Jingzhou North Road, where the highest price per square meter was once 90,000 yuan, and now it’s struggling to attract buyers at just over 50,000 yuan.”
“The value of my property has also dropped by 30% within two years… Our generation is desperately seeking to ‘get on the bus’ after graduation. Now, many are ‘getting off the bus.’ It’s not bad to be a spectator on the sidelines.”
“Don’t get carried away by public opinion. If you can avoid buying, then don’t buy. Let me tell you, if you buy it for 1.2 million yuan now, you might not even be able to sell it for 600,000 yuan later.”
In recent years, the Chinese economy has been deteriorating, with major real estate giants facing financial crises. The Communist Party has introduced a series of policies to support the housing market, attempting to revive the real estate industry, but with minimal success. Currently, housing prices are rapidly declining nationwide and have yet to hit rock bottom.
According to the latest report from the China Real Estate Research Institute, in June, the average price of second-hand residential housing in a hundred cities was 14,762 yuan per square meter, a 0.73% decrease compared to the previous month. This marks a continuous 26-month decline on a monthly basis and a 6.25% decrease year-on-year.
Currently, homeowners are noticeably engaging in “price-to-volume” transactions to stimulate sales, resulting in a continuous acceleration in the decline of second-hand residential prices in a hundred cities.
According to the China Index System’s hundred-city price index, in June, the price of second-hand residential properties in Hangzhou decreased by 0.58% month-on-month and 6.89% year-on-year. The average sample price was 36,245 yuan per square meter, with the median price at 32,961 yuan per square meter.
Furthermore, in several provinces such as Northeast China, Northwest China, Sichuan, Hunan, Hubei, Guizhou, and Guangxi, many mid-sized cities are currently seeing properties being sold at “cabbage prices,” with prices even dropping below 1,000 yuan per square meter.