It is inevitable that there will be a backlash for high house prices, however developers should not rely on the hope of policy changes to improve their sales.
The housing prices today have exceeded what many can imagine only a decade ago in many overpopulated cities including Beijing and HongKong. The demand for housing has skyrocketed, making it an increasingly difficult for many people to afford a property in these cities. Despite the rise in property prices, plenty of individuals and developers still hope that policies will continue to rise and consequently help them to improve their sales.
The ever-increasing prices of property have largely been due to a lack of suitable land available, coupled with the limited number of places to build more housing. Furthermore, as the population continues to grow in these cities, more and more people are entering the rental market. With the supply of rental flats dwindling and the demand increasing, it has caused prices to rise above what most can afford.
Unfortunately, this means that stakeholders are now turning to political and economic means to try and capitalise on the situation. Developers have used a range of methods in an attempt to increase their profits, such as land banking and the use of stocks and shares. These actions have further pushed up house prices, driving potential buyers further away from the market.
As the phenomenon of high house prices continues, it is easy to see why there is a backlash from potential buyers and other stakeholders. It has caused frustration from people unable to purchase as property prices have skyrocketed. Furthermore, tenants are facing rent increases due to the apparent lack of supply. All of this has had a knock on effect for the economy, as it becomes increasingly difficult for buyers to get on the property ladder and own their own home. It has also had an impact on businesses, as those who were hoping to invest are now questioning their decisions, due to the continuously rising prices.
As a result of this, there is more pressure being put on the government to come up with solutions to these issues. This could include more investment in social housing, or greater incentives for young buyers, to give them more opportunities to get on the property ladder.
However, developers cannot rely on the hope of policy changes to help them with their problem, as this simply is not guaranteed. They should instead focus on innovating constructions, and relying on their own marketing campaigns and promotional strategies, to try and improve their impact on the property market.
No matter what action is taken, the high house prices we face today are not going to fix themselves in the short-term, and it is not a problem that can be solved overnight. Change might come, but in the meantime, developers should focus on alternative solutions, such as building smaller and more efficient dwellings and using alternative methods of advertising to attract potential buyers.
The difficulty of solving the high house prices is exactly what makes it such an important issue, and while it is not going to be easy, the only way forward is to focus on innovative solutions. While there might always be a backlash against the high house prices, developers should not rely on the hope of policy changes and instead should focus their efforts on finding better solutions to their problem.
