Losing 1 million yuan after buying a house for two years: When ordinary people encounter a real estate crisis
Since 2021, the continuous decline in housing prices has led to the largest-scale asset shrinkage for Chinese people in the past decade.
Some people bought a house less than two years ago, but the price of similar listed properties has dropped by 1 million yuan. Others bought at the peak, facing both high housing prices and high interest rates. Now, not only has the housing price been halved, but the interest has doubled. The worst off are those who bought properties with high leverage in non-core areas. In some cases, the market value of the house is even lower than the remaining mortgage, a phenomenon known as an inverted market situation.
Chinese people, who have always been diligent and eager to invest in real estate, have once again suffered setbacks in the real estate market, which was once regarded as the "engine of wealth growth."
According to data released by the National Bureau of Statistics, in September 2021, the sales prices of commercial residential buildings in 70 large and medium-sized cities showed a slight decline month-on-month, and the year-on-year growth rate continued to slow down. This marked the beginning of the latest round of the real estate crisis.
However, before that, housing prices across the country had been rising for 76 consecutive months. The long-term and substantial increase in housing prices strengthened people's belief that "buying a house means increasing wealth." Meanwhile, the rapid rise of the Internet and emerging technology industries created a group of "new wealthy people" in a short period. Due to limited investment channels, real estate became the main way for ordinary families to accumulate wealth, which was in line with the perception of most people at that time. As Zhang Luo, a post-85s homebuyer, said, "Can buying a house be wrong?"
In 2019, even though Zhang Luo knew that the unit price of 15,000 yuan per square meter was more than twice the housing construction cost in a coastal city in the east where she lived, she still bought a 70-square-meter secondary school district house for a total price of 1.05 million yuan.
The next year, housing prices there began to decline slowly in the trend of "stable with a slight decline." At that time, Zhang Luo still harbored a glimmer of hope. "Can my house with a unit price of 15,000 yuan drop to 10,000 yuan?"
Another year later, the unit price dropped to 10,000 yuan. Zhang Luo still failed to recognize the situation. "Can my 1-million-yuan house drop to 500,000 yuan at worst?"
In March this year, Zhang Luo listed her house for 550,000 yuan, but no one came to view it. In fact, there were no transactions in the entire community in the past six months. She still had a mortgage of 440,000 yuan on this house, and her down payment and interest were all in vain.
This situation has happened to countless "Zhang Luos" across the country.
Photo source: IC PHOTO
A seemingly foolproof investment decision that fails can render decades of hard work in vain. Those who can't bear the failure share their stories on social media. The more tragic replies below can bring them a little comfort for a short moment - it's important to know that they are not the only "unlucky ones" going through this.
However, these self - comforting appearances cannot solve the specific contradictions in life. The money is gone, the person who made the decision to buy the house will be blamed, and the quality of life is bound to decline...
There are many theoretical interpretations of the housing price decline, such as "economic cycle adjustment" and "systematic adjustment." Ordinary individuals bear the most specific consequences.
Can buying a house be wrong?
Before Zhang Luo bought a house in 2019, she had several thoughts -
"First, I wanted to save money. I thought a house was a value - preserving investment, based on my understanding at that time."
"Second, I could get all my mother's pension. In this way, she wouldn't be involved in pyramid schemes or buy health products that might harm her. I thought she would spend the money recklessly anyway, so it's better for me to use it. Can a house be a bad investment? Can a house lose its value?"
"Third, with a monthly mortgage of 3,000 yuan, I could at least save this 3,000 yuan. Otherwise, I would just spend it on food and drinks."
"Fourth, I thought I would never stay in Beijing. After going back, I didn't want to live with my mother. So I wanted to buy a small house far from her. I wanted to buy a school district house because I thought it wouldn't depreciate."
So, Zhang Luo, who had just saved money for a few years, with the idea of saving and financial management, decided to buy a second - rate school district house built before 2000 on the first floor with a yard in a coastal city in the east. She paid a down payment of 550,000 yuan and took out a mortgage of 500,000 yuan. Among the down payment, 500,000 yuan was her mother's pension. The house and her mother were located at opposite ends of the city.
According to real - estate market data, 2018 was the peak of housing prices across the board, and 2019 was a year of "stable volume and slow price increase," with the transaction volume approaching the peak. So in the real - estate transaction hall that year, Zhang Luo saw a crowded room and long queues. The rising housing prices and the booming transaction market showed no sign of decline and gave no warning to homebuyers.
Photo source: IC PHOTO
Xiao Yi bought a house one year earlier than Zhang Luo, in the second half of 2018. At that time, Xiao Yi wanted to get married and had just sold a company, so he had sufficient funds. In addition, he saw that housing prices in Guangzhou had been rising since 2014, and the average price of the property he was interested in had risen from 40,000 yuan to 60,000 yuan. Given the rising trend at that time, Xiao Yi thought he would never be able to afford a house if he didn't buy it soon.
So, he chose a rare new property in the old city area of Guangzhou. The new house was fully decorated, in a school district, and well - connected. The total price was 6.4 million yuan. Because he wanted to keep some funds for further investment and was confident in his income, Xiao Yi chose to buy the house with high leverage, paying a down payment of 2 million yuan and taking out a mortgage of 4.4 million yuan.
In 2018, when the real - estate market was booming, Xiao Yi, who was born in 1995, had no advantage in loan credit. He was young, had no assets in his name, had only 10 months of salary records from his previous entrepreneurship, and didn't even have a credit card. Therefore, his mortgage interest rate was raised to about 6.45%. Initially, he had to pay 26,000 yuan in mortgage every month, of which 21,500 yuan was interest.
In the three years after Xiao Yi bought the house, the unit price of the property continued to rise. He remembered that in 2021, the transaction unit price of an apartment upstairs was just over 70,000 yuan. So, for some time, Xiao Yi thought his decision to buy the house was correct.
Era also thought she had avoided the peak of housing prices when she bought an old and shabby top - floor apartment in Fengtai, Beijing.
In April 2022, just one month after Era and her husband got married, the two young migrants to Beijing needed a home of their own, at least where they could keep cats freely without being restricted by the landlord. Another important point was that they didn't want to miss this opportunity to get substantial financial support from their parents.
In the middle area between their workplaces, they fell in love with a small two - bedroom apartment facing south. It was on the sixth - floor top floor and was built in 1994. "The width of the bedroom was the same as the width of the window. Moreover, there were no obstructions on the top floor, so the bedroom seemed very large and bright when you entered." The young couple, who hadn't seen many houses, were immediately conquered by the sunlight in the house.
This 67 - square - meter two - bedroom apartment listed at 3.19 million yuan was finally sold for a total price of 3.155 million yuan, with a unit price of 47,000 yuan. They paid a down payment of 1.55 million yuan and took out a mortgage of 1.6 million yuan.
The joy of having a new home lasted for more than a year. During this period, housing prices in the community even rose. At the peak, the listed price could reach over 50,000 yuan.
At the beginning of last year, Era was pregnant. She realized that the small house she had bought in a hurry couldn't accommodate their complex life after having a child. Just arranging for the elderly to take care of the child was already a problem. She wanted to buy a bigger house.
But when she opened the real - estate trading app again, she saw that housing prices were falling all the way. In November last year, the small house welcomed a new owner, and its unit price had dropped to 37,000 yuan.
In February this year, Era used AI to calculate the cost of changing houses. The result from DeepSeek showed that she had lost 1.15 million yuan on this house.
"If you don't sell it soon, this house will become a negative asset."
The housing prices in the eastern coastal city where Zhang Luo's hometown is located showed signs of decline earlier than those in first - tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen. In 2020, the year after she bought the house, housing prices began to fall. In 2021, when the pandemic broke out fully, she found that there were no transactions in this community at all. In 2022, she decided to list the house for sale. She knew she couldn't sell it at the original price, so she listed it for 850,000 yuan. Because she bought a house in Beijing and needed to recover the funds urgently.
The house in Beijing was more than 30 square meters and cost 2.4 million yuan. Among them, 200,000 yuan still came from her mother's pension, and 1 million yuan was borrowed from relatives and friends. Zhang Luo made a large table in a graphite document, recording all her "creditors" and the corresponding debts. In the following years, Zhang Luo described herself as working extremely hard to earn money.
The house was listed for 850,000 yuan for half a year, but there was no progress. One day, Zhang Luo suddenly received a call from a person claiming to be the manager of a real - estate agency. He rudely asked Zhang Luo to remove the listing information from the Internet. "No one will look at it at this price."
This phone call was the first hint for Zhang Luo to correctly recognize the situation at that time, although it made her very unhappy. But it also made her realize that the agent helping her sell the house was the same one who had taken her to buy the house. Maybe out of guilt or embarrassment for her buying the house at a high price, the agent didn't convey the real housing price trend to her in time, causing her to miss the opportunity.
The house was rented out at 1,800 yuan per month, which was just enough to cover the mortgage interest. During this period, Zhang Luo still had a glimmer of hope. "Can my 1 - million - yuan house drop to 500,000 yuan at worst?" "What if the local cultural and tourism industry becomes popular?" Once, a tenant asked her if she would sell the house for 560,000 yuan, and Zhang Luo flatly refused.
Two years later, Zhang Luo's "awareness finally improved." She decided that the house was a bad asset and needed to be sold quickly. She took action. To build trust with the new agent, she first transferred a 200 - yuan red envelope to the agent and promised to give an additional 2% commission after the deal was completed.
The agent became visibly more active. Various house - selling methods such as "Good House Treasure" were used, and some people came to view the house and made offers. At that time, Zhang Luo's psychological price had dropped to 650,000 yuan. But just when the house was about to be sold for 600,000 yuan, the buyer jumped to buy a new property.
Afterwards, the agent told Zhang Luo, "Sister, now people all buy new properties. No one buys second - hand houses. Although this is a school district, it's not the best one. Even the best school districts are empty now."
Photo source: IC PHOTO
Xiao Yi also realized the crisis.
On November 9, 2023, Guangzhou officially issued and implemented the "Measures for Calculating the Floor Area Ratio of Construction Projects in Guangzhou." It stipulates that the proportion of semi - enclosed spaces within the residential unit to be half - counted in the floor area ratio will be increased from the original no more than 15% of the internal floor area of the unit to 20%. It also allows the setting of a main landscape balcony with a continuous opening rate of no less than 40% without limiting its depth, and the upper limit for high - quality residential buildings can be appropriately increased.
The semi - enclosed spaces refer to balconies, entrance gardens, or equipment platforms. After the increase in the half - counting proportion of this part, the usable area ratio of new houses in Guangzhou will be further increased, with a maximum of up to 140%.
After learning this news, Xiao Yi comforted himself secretly, "What they give are just balconies and bay windows." But until last August, when he went to see several "new - regulation houses" with his colleagues, he couldn't calm down anymore. "When you go there, you'll find that the balconies can be directly enclosed, and they are all real usable areas. Even if it's a bay window, it's still your bay window, right?"
The most impactful house for him was listed at 69 square meters, with three bedrooms and two living rooms, and a usable area of nearly 100 square meters, priced at 1.8 million yuan. "It has a good orientation and convenient transportation. It's only one or two kilometers away from my house, but its price is half of mine, and the area is much larger