Is it possible for house prices in Handan City, Hebei Province to drop? Please analyze the housing market in Handan!

Demand side: With the rapid rise of housing prices in recent years, housing prices have far exceeded the affordability of ordinary people, and high housing prices will definitely curb a lot of demand. The so-called ratio of house price to income is the ratio of annual household income to house price. For example, the ratio of house price to income is commonly used internationally to measure whether the house price is reasonable. It is generally believed internationally that it is reasonable to keep the ratio of house price to income at 1: 4-6. The ratio of house price to income in Handan has been much higher than this level, reaching about 1: 15-20, which means that a family can't buy a suite for at least 15 years without eating or drinking. This situation is not only related to high housing prices, but also related to the structural supply imbalance in Handan. At present, the residential area supplied by Handan is relatively large, 100 square meters. Huxing below 90 square meters is rare in the market. Even if there are small huxing, most of them are supporting roles of large huxing. There are more or less certain defects in design or geographical location, which leads to the lack of effective supply of small huxing in the market, which is also one of the reasons for the relatively high house price income.

Supply side: Although the national policy has strict restrictions on the conversion of cultivated land into construction land, with the implementation of Handan's policy of "one big step a year, three years of demolition to promote large-scale construction", the transformation of old cities and villages in the city has been mentioned with unprecedented enthusiasm and climax. According to incomplete statistics, from June 1 day to June 1 day, 2008, as many as 40 old construction sites were put up for sale in the main urban area of Handan. According to insiders, the scale and speed of land transfer in 2008 is unprecedented. In the next two years, these lands will be fully listed, forming a huge housing supply, which will inevitably aggravate the further imbalance between supply and demand in the market, lead to oversupply in the market, and the real estate housing price will further decline.

Real estate development is a capital-intensive industry, and capital is the primary factor of real estate development. Under the macro-environment of the current national monetary policy, the financing cost and difficulty of real estate enterprises will greatly increase, and some weak development enterprises will always have the risk of capital chain breakage. Therefore, in order to develop and survive, these development enterprises will quietly sell their funds to the outside world before the project has the pre-sale conditions, even before the project is established. Of course, it also needs to be attractive at a rather low and shocking price. In Handan, these projects often appear in the market in the form of group buying, and the prices are unexpectedly low. The low-cost group purchase of these projects is like catfish in the market, which makes the surrounding buildings have to adopt a more conservative price strategy.

In the information age, with the strong wait-and-see atmosphere of domestic first-tier cities spreading to the third-tier market, Handan has also become the hardest hit area at the junction of four provinces. The wait-and-see atmosphere not only delays the purchase behavior, but also affects its psychological expected price, which further aggravates the public's psychological expectation that the price center of gravity will move down. In this game between developers and property buyers, property buyers are obviously winners. Among them, investment groups have played a vital role in buying houses. In the rapid rise of housing prices in Handan a few years ago, many people with investment vision saw the huge profit space brought by real estate investment. In just a few years, the real estate market has trained a large number of investment customers. According to preliminary estimates, about half of the houses sold in Handan in recent years are used for personal investment, and almost all the affordable housing is used for investment. About 30% families in the main urban area of Handan own more than two houses. For example, some residential areas in eastern Handan have been built for many years, but the occupancy rate is extremely low. The author thinks that although Handan is a third-class city, the public's investment consciousness is not inferior to that of the first-tier cities with developed economy in the south, which means that when the market starts to adjust downwards, these investment groups will avoid risks and refuse to give priority to buying houses, which will lead to a sharp decline in the market demand for housing and an imbalance between supply and demand.

Nowadays, the real estate industry has become a hot topic in media and expert comments. Many of them think that house prices will not fall too much. The main reason is that land cost, building materials cost and labor cost are on the rise for a long time, so house prices are more flexible. For example, from the five plots auctioned in Handan in May 2007, according to the plot ratio of 3.0 stipulated by the government, the average price of residential land is about 2.5 million yuan/mu. Together with relevant taxes and fees, the floor price is as high as 1.300 yuan per square meter, and the comprehensive development cost of its commercial housing is about 3 1.000 yuan per square meter. If the village in the city is reconstructed, its comprehensive development cost may be higher. Because the high cost has greatly reduced the profit margin of the real estate industry, the price reduction is limited. But the author holds different views on this. Cost is the decisive factor, and the real decisive factor of house price is the relationship between market supply and demand. In the market system, when the product is in short supply, the price can be much higher than the cost to adjust the market demand, but when the product is in short supply, the price can also be lower than the product cost to stimulate the market demand, so it is a bit far-fetched to evaluate the price trend of real estate only by cost.

Some scholars say that real estate is a national pillar industry and contributes a lot to GDP growth. The deep decline in real estate will definitely affect the healthy development of the national economy, and the relevant government departments will never let the house prices go down. I agree with this, but only if the government analyzes whether the real estate is a healthy and rational adjustment before intervening. Commercial housing is different from other commodities. It is commercial and has certain sociality. As the basic means of social production, excessive housing prices will inevitably have an impact on society. In Handan, the price of real estate has far exceeded the affordability of the local market. The author believes that this price adjustment is a rational adjustment of the market and the government does not need to intervene. Even if the government rescues the real estate market, I believe the effect will not be too obvious. After all, the high price of real estate has suppressed a considerable part of demand. As long as housing prices and household income are asymmetric, the government's efforts to save the market will be in vain.