Experts state that "significant drops in housing prices lead to the greatest financial losses for ordinary people." How should this viewpoint be regarded? Is lower housing prices always better?

Professor Ruan Jia from the School of Economics and Management at Beijing Jiaotong University mentioned in a speech: “The People’s Bank of China’s ‘2019 China Urban Resident Household Asset and Liability Survey’ shows that the average housing asset per household in China is 1.87 million yuan, accounting for 59% of the total assets. If housing prices decline significantly, ordinary people will suffer the most financial losses. For example, if urban housing prices drop by an average of 10%, it would be equivalent to a reduction of 187,000 yuan in assets for each family.” Are ordinary people the hardest hit by falling house prices? Is lower housing prices always better? Is it better for housing prices to be lower? - Tencent News

Actually, I really want to see fireworks.

I don’t mind how much hardship I endure, I just can’t stand seeing them comfortable. That’s all.

As the experts say, I’m willing to suffer more. As long as I see them facing hardships too, I can happily eat two more bowls of rice.

Recently, an anti-corruption documentary has been airing for four days in a row. I’ve been so happy, eating two extra bowls of rice every evening.

The head of the statistics bureau previously mentioned that when ordinary people can’t find jobs, they can rent out their surplus houses. But when housing prices fall, aren’t they the ones who suffer the most?

This rhetorical technique is called a callback… As you can see, the experts are still very meticulous.

Since the data quoted is from the National Bureau of Statistics, with only a 3.21% decrease, how can there be a significant drop in housing prices? If there hasn’t been a significant drop, how can ordinary people suffer the most significant loss of their assets? The quoted data cannot support this—discussion to follow.

On November 16, 2023, the National Bureau of Statistics announced that the new house prices in 70 large and medium-sized cities in China had experienced the largest decline in eight years in October. According to the “Hundred Cities Price Index Report” on December 1, 2023, the average price of second-hand homes in the hundred cities has been continuously declining month-on-month for 19 consecutive months, with a year-on-year decline expanding to 3.21%.

Stock Market Decline and Losses: A Concern for the Common People

The stock market is falling, and the biggest losers are the common people.

In August this year, I followed the advice and entered the stock market to buy low-priced stock funds recommended by Hu C. In less than six months, I lost over a thousand dollars, and the fund prices were cut in half. This decline is even more severe than the plummeting real estate prices.

I’d like to ask the experts: you mentioned before that in times of economic downturn, the government would indirectly distribute money to the common people through the stock market. How is it possible that the common people are losing money instead? Is this how the money is being distributed? Why can’t the government boost the stock market in the same way they boost housing prices?

Can the government stand by and watch the common people lose money in the stock market? We hope that the national team will intervene, just like they did to rescue the real estate market, and help revive the stock market to bail us out.

I am an ordinary citizen, I don’t have much money, so I support a slight decrease in housing prices to give it a try.

Anyway, it’s all the same because I haven’t made much more money even if housing prices rise.

So, let’s give a slight decrease a try.

Families with only one property. In the face of high property prices, they simply cannot afford to prepare a property for their children. Only those with multiple properties will experience some losses. So, what is the percentage of people who own multiple properties?

In many major cities, families are crowded into old and run-down homes. While they may have assets worth millions on paper, their living conditions are often unbearable. How can they improve their situation when property prices are so high that they cannot afford to buy a better home in their lifetime, unless they encounter demolition?

Although owning multiple properties may appear to incur losses on paper, with China’s aging population and decreasing birth rates, can you actually sell them at high property prices? If you can’t sell them, what’s the point of holding onto them?

Most experts say that listening in reverse typically won’t lead to significant errors.

Trust the Experts

Comrades, you must believe that experts never talk nonsense!

Do you know they are experts? Why isn’t your brain as smart as theirs? Otherwise, how could they become experts?

But he looks like a dog, huh!

What do you mean looks like? He’s clearly a dog serving the interests of the elite!

What has allowed him to be ahead of all humanity by 100,000 years in transforming from a human to a dog? Why is he taking the opposite stance of the people to say such things?

Oh, it turns out they’ve been given too much, way too much.

And they have too many houses themselves, so isn’t lowering prices just a loss for them?

So, the experts say:

If property prices drop significantly, ordinary folks will suffer the most!

They say it as if experts have ever cared about the lives of the common people.

They’ve never cared about the lives of the common people, yet now they care about your losses?

In the end, when they stand up to speak, it’s all for their own interests! Who’s giving them money? If they don’t get paid, standing up to speak is just pure sand behavior!

Of course!

They’ll speak for whoever pays them!

How do experts define “ordinary people”? The group with three to five properties like him?

Experts == Real estate speculators.

I don’t know whether this expert considers the family’s sole residence as an asset. If so, then what he says is correct.

The statement is correct, but the value of assets on paper is of no use to the average person. These numbers cannot buy food or clothing. On the contrary, for highly leveraged real estate speculators, a decline in assets is a fatal blow.

Experts and Common People

The stray dogs below are barking, and the wild cats are in heat. We don’t need to understand why they make noise. After all, experts should act like beasts.

I own a house, but I still hope for lower property prices.

I can represent some ordinary people because I am one of them.

Among these experts who clamor for rising property prices, delaying retirement, reducing rest time, and extending working hours, are any of them common people?

These experts all own three or more properties, so they are the ones who least want property prices to fall;

These experts, leaders, hold a lot of power and resources, so they are the ones who least want to retire;

These experts take Jack Ma’s money, watch graduate students work for them for free, so of course, they want ordinary workers to be 996 and 007.

Therefore, the current experts, public intellectuals, and famous journalists, all should be lined up for possible execution. Shooting one every other time should surely catch some fish.

And individuals like Bai Jing, I believe their status in people’s minds in the future will not be inferior to Chai Jing.

Misunderstanding the Common People

This expert clearly doesn’t understand what common people are. Common folks usually have only one property, which is used for living and not for sale. Therefore, the fluctuations in property prices are meaningless to them since they won’t cash in on it. Regardless of the property’s value, it’s just wealth on paper, similar to the virtual joy beans in a card game.

The ones who actually suffer significant losses are those who own multiple properties, especially those who speculated with business loans before. They not only bear the brunt of falling property prices but also have to contend with loan interests.

But can those who own multiple properties still be considered common people? After all, obtaining business loans for property speculation is relatively easy, isn’t it?

So, these experts are overestimating the common people.

From what I see, common people, in order to buy a house, struggle to save for down payments across generations, cutting back on expenses. They rack their brains each month to make mortgage payments, and some even take up part-time jobs or do food delivery just to make ends meet.

Apart from depleting their savings for down payments, monthly mortgage payments often consume more than half of their monthly income. If property prices drop, their purchasing power will significantly increase.

True common people will benefit from lower property prices, while the losses will be borne by the affluent class with multiple properties.

Experts represent ordinary people, entrepreneurs represent employees, and the wealth of the people represents the common citizens. Truly a great nation under the heavens.

Well, do those who haven’t bought a house in their place of work count as ordinary citizens?

Are experts hoping for a big rise?

Likewise, not falling is also a number. Selling at a high price and buying at a high price, even Sun Tzu cannot turn things around. Houses weigh down on several generations.

This viewpoint is directed towards those who flip houses!

It’s better to have a significant drop, hurting one generation, than to have a continuous rise causing harm to generations.

The Impact of a Significant Housing Price Drop on People with Mortgages

Debt is inflexible, while asset prices are elastic. A substantial rise is joyful, but a steep fall is disastrous. When housing prices and stock prices plummet, those burdened with debt always suffer the most, encompassing both financial losses and emotional stress.

Is Lower Housing Price Always Better?

This question is akin to “Is lower cost of living always better?”

The experiences of 2023 have taught us that deflation can lead to reduced corporate profitability, unemployment pressure, and decreased overall happiness. Even though pork prices have become more affordable, our lives haven’t become happier or more joyful.

The same principle applies to housing.

Extremely low housing prices correspond to low prices in general, including our wages and income.

There is no scenario where housing prices are extremely low while other prices remain high. Houses do not materialize out of thin air; they require investments in resources such as land, labor, and capital. If housing prices are very low, these resources will shift to other sectors, leading to a decrease in housing supply and prices returning to normal levels. If housing prices persistently remain low, it indicates that labor and capital are inherently undervalued in that society, resulting in low wages and income. This is merely a low-level equilibrium and not a desirable situation.

Just like in the 1980s when goods were cheap, but incomes were low, we do not yearn for such a life.