Older, smaller homes are being snapped up frantically! A rent-to-sales ratio exceeding 2% attracts a wave of bottom-fishing investments

This year, the second - hand housing market in major cities has rebounded. It is reported that the small - sized old - city apartments with a total price of less than 3 million yuan are driving the market heat. Not only are young people with rigid housing needs flocking to buy, but many investors are also making bulk purchases at low prices. Some people have bought 8 apartments at once and are achieving stable returns through rent.

Industry insiders analyze that currently, the rent - to - price ratio of old and shabby apartments "beats" stable financial products such as bank deposits and national bonds. In the era of low interest rates, they have become scarce "cash - flow assets".

First - tier cities represented by Beijing and Shanghai have played a leading role in this year's real - estate market. In April this year, 18,000 second - hand residential units were sold in Beijing, setting a new monthly high for April in the past five years. In Shanghai, 29,000 second - hand commercial housing units were sold in April, and the transaction volume was at a high level compared to the same period in recent years. There were 8 days when the number of filings exceeded 1,000 units. A research institution said that the above trend further shows that the extremely high cost - performance of "old and shabby" housing units last year has continuously attracted "extremely rigid - need" buyers into the market.

"The proportion of low - total - price properties in second - hand transactions is continuously increasing. This phenomenon is not only seen in Beijing and Shanghai but also in other big cities like Guangzhou," said an analyst from an institution.

Data shows that the rent - to - price ratio of old and shabby apartments in the core areas of key cities has generally exceeded 2%, with an average of up to 2.67%. In popular cities such as Chengdu, Wuhan, and Chongqing, it has even exceeded 3%, "beating" the 1.3% five - year fixed - deposit interest rate of banks and the 1.8% ten - year national bond yield.

It is reported that a buyer in Chengdu seized the market low point and bought 8 old and shabby apartments for a total price of 3.3 million yuan. The monthly rent income is 21,000 yuan, covering the monthly mortgage payment of 14,000 yuan, achieving rent - to - mortgage and earning cash flow effortlessly. There is also an investor in Tianjin who bought 7 old and shabby apartments with full payment, and the comprehensive rent - to - price ratio is about 5%.

The China Index Academy believes that low - total - price and small - sized housing units are the core support for this round of market. It reflects the attractiveness of the cost - performance advantage of second - hand housing to buyers with rigid needs. In the short term, as the second - hand housing transactions in core cities continue to increase, market activity is expected to gradually spread to larger - area and higher - total - price segments, accumulating momentum for the subsequent steady recovery of the market.

Some analysts also say that in addition to price and return, the strong supporting facilities of old and shabby apartments are the key for young people to enter the market. Most of these housing units are located in the core areas of the city, close to subways, commercial districts, and hospitals. The commuting efficiency and living convenience are far better than those of new houses in the suburbs with no supporting facilities. At the same time, most of the housing units come with high - quality school districts, perfectly meeting the rigid needs of young families for household registration, child - rearing, and schooling, taking into account both the practicality of living and basic people's livelihood needs.

Policy support has further strengthened the value foundation of old and shabby apartments. Now, the country is comprehensively promoting the urban renewal of old residential areas. All old residential areas built before 2000 are included in the renovation scope, and the living quality is upgraded through reconstruction on the original site, installation of elevators, and pipeline renovation. It is reported that the urban renewal market will be huge during the 15th Five - Year Plan period. In the next five years, China's urban renewal can complete at least 15 trillion yuan in investment. State - owned enterprises in many places are purchasing old and shabby apartments and converting them into affordable housing, and promoting the exchange of old for new, providing stable support for the housing units.

This article is from the WeChat official account "New Paradigm of Home Furnishing", and is published by 36Kr with authorization.