I just asked a friend who knows the situation in Japan better and learned that house prices in Tokyo today are quite normal.

In contrast, domestic housing prices are only tending to bubble, but I think they are still far from a bubble. Many so-called economists are clamoring every day about how to bring down domestic housing prices, why the government should provide 2/3 of the housing supply, etc. It’s all nonsense, and everyone will mention these ideal assumptions that cannot be realized. A few days ago, it was announced that some of the affordable housing in a certain district of Beijing would be converted into commercial housing to make up for the developer's cost losses caused by rising land prices, which aroused public discussion.

1. The scale of the property market is nearly 10 times larger than that of A-shares, and property market avalanches are generally a disaster for local people. When overseas hot money speculates in a region, they first speculate in real estate. After making money in the main rising trend of real estate, they sell the houses to locals; then they transfer to the stock market; and finally they switch to the foreign exchange market. The later they realize the money, the more efficient they are in escaping. Once a local is trapped at the top of the property market, no one will come to rescue him; overseas hot money may come back to make waves in the stock and foreign exchange markets again, but he will never be the savior of the property market.

2. There is a crisis of leverage amplification in the property market. When the stock market crashes, there will always be stocks; but real estate speculation is different. It is often 20% to 30% down payment, which is a leverage increase of 3.3 to 5 times. Once the property price drops by 20% to 30%, the original down payment will be A complete loss, and the bursting of the real estate bubble will inevitably lead to a major economic crisis. Unemployment will increase significantly, and it will be more difficult to repay loans. Once the payment is cut off, home buyers will go bankrupt and even have negative equity. Hong Kong has a personal bankruptcy system, but the mainland does not.

3. If the economic and financial crisis is stagflationary, then the inflation rate will rise, mortgage interest rates will rise accordingly, and it will be easier for home buyers to cut off their mortgage payments. Some sensitive people will sell their houses quickly to avoid greater losses. Once house sales become common, the collapse of property prices will accelerate. Since land and buildings can be used as mortgage assets, revaluation after a fall in property prices will lead to a subsequent contraction in credit.

4. The cost of malicious short selling of the property market is smaller than that of the stock market. In China's A-shares, since there are no short-selling tools such as stock index futures and margin trading, malicious short-selling of the stock market will always result in losses. However, if someone maliciously shorts the real estate market, they only need to sell some properties at the peak of the real estate market bubble, and then sell them at reduced prices without actually completing the transaction, which will achieve the effect of driving panic people to follow suit.

Therefore, economic decision-makers should be highly vigilant about the serious consequences of the real estate bubble and take decisive measures to bring the real estate bubble to a soft landing. There are two ways to address the symptoms: first, increase the supply of land and combat hoarding; second, increase the down payment and interest rate of mortgage loans for second or more homes to combat real estate speculation.

The fundamental solution lies in changing the current land distribution policy: 1. Change the one-time auction of 70-year land use rights to a method of collecting property taxes on an annual basis to fundamentally curb speculation; 2. Realize the distribution of land transfer income Public supervision, half of which should be used for the construction of low-rent housing and other affordable housing.

If the Japanese tragedy repeats itself in China, not only will the national wealth be wiped out, but those with vested interests will inevitably be punished by history