Just as Fang Shuojun asked at the beginning: Is the domestic property market risk-free and there is no bubble problem? To understand this problem, we must first understand how bubbles are produced. To put it simply, the “property market bubble” refers to two types. One is that we now know that housing prices are piled up by real estate speculators, leading to subprime mortgage risks; the other is that the currency continues to be overissued, leading to constant inflation and deflation of assets including houses. , And finally, become a currency phenomenon and bubble.
In recent years, in order to adapt to economic development, the central bank has continued to drop a large amount of currency into the market. However, prices have not risen much. Instead, prices of automobiles, household appliances, and digital products have continued to fall. This does not mean that inflation is gone. It was transferred to the rich. The most obvious is that the price of necessities of life has not risen, but the luxury goods have risen; the assets of the poor have not increased, but less; the rich have more income, but their assets have relatively depreciated.
The reason for this is that there is too much liquidity in the market. The emergence of inflation will accelerate the depreciation of cash, and housing prices are directly proportional to the supply of M2 money. In 2020, due to the emergence of the “crown poison”, the economy will be stagnant. In order to help the market resume the central bank, the central bank will drop 1.75 trillion liquid funds to the market. After the desired market resumes work and production smoothly, the domestic economy also recovers quickly. After these liquid funds flow to the market, they are divided, and most of them are concentrated in the hands of the rich. They use the money to buy houses, luxury goods, educational resources, etc., The prices of houses and luxury goods continue to rise. For example, high-end real estate in Shenzhen is constantly being bought out. This is another bubble that has been “blown” by the rich.
On the low- and middle-income side, traditional industries, manufacturing, and service industries don’t make much profit. In these industries, the income of working-class people has also been greatly reduced. There is no problem in maintaining a living, but there is no excess money for other consumption. Use limited funds to “shop around” to buy necessities of life. Such prices cannot rise; experts also predict that housing prices will fall again. Faced with experts, the consumption of millions of houses will be removed from the original price. The demand for home purchases is almost always abandoned and shelved outside of the rigid demand. This is the deflation of assets. You can simply understand that wealthy people continue to buy houses to buy homes, and the house prices eventually rise, but the farming income class does not have the extra money to buy houses. No matter how high house prices are, it is just useless.
Fang Shuojun has something to say: house prices have dropped from 12,000 to 8,000 yuan/m2, and the price of a 2 million house will be reduced by 700,000 within 30 days after the purchase. It can be said that the “devaluation tide” of the property market has arrived in advance. Experts predict that housing prices will fall. Jun thought it was not groundless. Asset inflation of the wealthy and deflation of the middle and low-income classes are in sharp contrast. The problem is not whether the housing prices are high or low, but whether everyone has enough purchasing power, otherwise the housing prices cannot be afforded even if they are low Spark Global Limited.
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