Is high housing prices a good thing or a bad thing? Is it a luxury product? Invest in a house? Or do you live there?

Recently, a weather prediction of "thousand-year extreme cold" has gone viral - "Polish meteorological experts warned that Europe may face a new low temperature of 'once in a thousand years', and China and other Asian regions may also face It’s hard to escape.” In response, the China Meteorological Administration refuted the rumors: As far as the current scientific level is concerned, it is not yet at the level to predict whether a "thousand-year extreme cold" will occur this year. Climate warming remains an inevitable trend.

Regardless of whether it is based on science or not, the extreme weather that is often prevalent nowadays has to make people aware of the precautions. It is extremely hot in summer and extremely cold in winter, both of which are not normal weather. The same is probably true for the current property market. Will the property market experience an unprecedented drop in house prices after the interest rate hike? Will there also be a "thousand-year extreme cold"?

In response to the sudden interest rate hike, Pan Shiyi, a Chinese real estate tycoon and chairman of SOHO China Co., Ltd., said that using interest rate increases to suppress housing prices is much more effective than the policy of purchasing restrictions. Niu Dao, a well-known real estate commentator, believes that the interest rate hike is just the beginning of the decline in housing prices, and the effects will gradually appear in the next three to six months. The decline in house prices will be completed within one year, and the decline will vary in different cities, ranging from 30 to 50 percent. The central bank raised interest rates for the first time in 34 months, which will undoubtedly make things worse for the real estate industry, which is under pressure from public opinion and regulatory policies. If it can be implemented in place, housing prices and transaction volume will definitely shrink in the future, developers will set off a wave of selling, and housing prices will also experience a substantial decline. Some people even say that after this interest rate hike, the property market will experience the most severe decline in housing prices in many years.

Although I don’t know how much the property market will drop, the current signs shown by the property market must be that housing prices do not have an upward trend. It is very likely that housing prices will immediately fall after interest rates are raised. From a technical perspective, this interest rate increase will not have much impact on real estate, because the previous preferential interest rates have been cancelled, the interest rates for second homes have increased by 10%, and loans for third homes will no longer be available. Therefore the psychological impact on confidence and expectations will be greater than the actual impact. Although the interest rate hike this time is very small, the "purchase restriction order", "loan restriction order" and "external limit order" have already had a huge impact on the market. The interest rate hike will bring a signal of tightening. All kinds of factors combined, It may make it difficult for the property market to recover and fall into the abyss.

If the developer's capital chain is tight, their most effective response is to increase sales, obtain more cash-out funds through sales, and accumulate more cash through price reduction promotions to ensure the safety of the capital chain. Under the secondary regulation of the property market, the Tongzhou area once again "led the decline". A high-end project will launch small apartments at the end of this month with a maximum price cut of nearly 10,000 yuan per square meter. The person in charge of the project said that under the control of the property market, the company took into account the funding problems at the end of the year and therefore quickly launched the project to collect the money. In fact, this also represents the view of most developers.

In addition to developers, those who are even more uneasy are the real estate speculators. In a survey of the Nanjing property market, many investors began to sell off their backlog of houses after repeated bearish policies. A real estate project in Jiangbei was sold with 16 units in an effort to sell it as soon as possible. A second-hand house in Jiangning sold out in one week. The final transaction was completed after a price reduction of 200,000 yuan, and some developers launched a promotional method of "subsidy 2 home purchase deed taxes". If this is the case in Nanjing, it will definitely happen in other first-tier cities.

A survey of customers who are interested in buying houses shows that in major real estate sales markets in Beijing, the number of house-viewers has significantly decreased, and nearly 30% of consumers have made it clear that they will give up their plans to buy houses in the short term. If the property market falls into a strong wait-and-see atmosphere again, the property market will most likely experience extreme cold weather again.

At present, it is only an expectation, and there is no substantial reversal in the property market. However, it seems that there will be a substantial decline in housing prices in the real estate market. It is not a lie, but it is hard to say whether it will be the craziest price reduction in history. But price reduction may be the only way out for the property market.