Period 9 Part 3
By MO
Published On August 2, 2023
What new features will real estate have in the era of the Period 9?
Specifically, the real estate during the Period 9 will present three major characteristics:1) Real estate is no longer at its golden era.
The era of general housing price increases has passed. The industrial positioning, supply and demand relationship, governmental policy and market structure of the real estate industry will undergo some changes during the Period 9.Although the golden era for real estate has passed, it does not mean the status of real estate as a pillar industry is over. The United States is a good example. It has been going through urbanization for many years, the proportion of real estate in GDP has always remained in the top three position among other industries.
The era of general housing price increases has passed. The industrial positioning, supply and demand relationship, governmental policy and market structure of the real estate industry will undergo some changes during the Period 9.Although the golden era for real estate has passed, it does not mean the status of real estate as a pillar industry is over. The United States is a good example. It has been going through urbanization for many years, the proportion of real estate in GDP has always remained in the top three position among other industries.
2) There will be no housing price crash.
In view of the importance of real estate itself and the proportion of real estate in the wealth allocation among residents, the rapid decline in housing prices will not occur during the Period 9. Even if there are signs of a slump, a country will introduce various policies to regulate real estate in order to stabilize housing prices.
However, the regulation of real estate is only to stabilize housing prices, and will never let it return to the era of real estate speculation. After all, real estate speculation can only enrich a small number of people. In the long run, it is not good for the healthy and stable development of the entire real estate industry.
3) The head effect is more and more obvious (头部效应愈发明显).
Here are three “one-thirds” of the Period 9 era:
Only 1/3 of developers will survive.
Only 1/3 of cities have investment value.
Only 1/3 of the properties are worth buying.
A long time ago, people didn’t have houses, not because there were too few developers, but because there were too many developers. In particular, there are many small developers. Although small developers have enclosed land, they lack development capabilities, resulting in reduced supply and frequent unfinished housing.
The more developed any industry, the more obvious the head effect. For example, The two giants of Tencent and Alibaba basically control the entire Internet in China; the three giants of Air China, China Eastern Airlines, and China Southern Airlines control the mainstream routes of China’s aviation industry; Small developers are gradually being eliminated by the market. Large developers have abundant funds and strong development capabilities, so the supply will increase accordingly, and consumers will have more choices.
As for 1/3 of the cities with investment value and 1/3 of the real estate worth buying, I have been wondering if it is too optimistic.
Good things are always in short supply, and so are good homes. If in a city, there are one-third of the good houses, it is not easy.
For this point, I will leave it to the readers to find out.
Stay tuned to Day 4, where should you plan your real estate investment in the Period 9?
