Financial real estate is a method of asset allocation. By configuring a certain financial product, it can maintain and increase value and generate stable cash flow income.

This asset allocation method is similar to traditional investment properties, but more flexible and convenient.

In the past two years, we often see the term "financial real estate".

What does this mean?

What's the value?

Can it be considered as an asset allocation?

1. What is "financial real estate"?

To put it simply, it is to configure a certain financial product so that it can maintain and increase value, and continue to generate stable cash flow income.

This is just like many people in the past who were keen on investing in real estate, sitting back and waiting for the value to increase. After renting out, they can still collect rent on time every month and generate cash flow income.

Because of its financial nature of achieving the same goal through different means, we call the tools that can achieve this asset allocation purpose "financial real estate."

2. Who is suitable for "financial real estate"?

So which groups of people are financial real estate suitable for?

Including but not limited to these groups of people: people who own multiple properties in non-core areas of first-tier cities.

People who own multiple properties in second- and third-tier cities and below.

People who own a property in first-tier cities and invest in one or more properties in second- and third-tier cities and below.

People who own a home and plan to leave a property to their children or invest in property for retirement.

In the face of "financial real estate", holders can let it play the following roles: "Sell the house" to cash out when the price is right, get back the principal and income, and make other plans.

If you are short of money, you can sell a house to partially cash out, and then continue to appreciate the value and collect rent by "renovating a big house into a small one".

Temporary turnover can be used as a mortgage loan, and the value will continue to appreciate after the loan is over; if you keep it forever, after your death, the "financial real estate" becomes an asset that can be passed down in a timed, targeted, and fixed amount, and can continue to be used by the second and third generations; for business owners,

It can also effectively isolate the joint liability risk of company debt.

3. Is physical real estate no longer popular?

Whether physical real estate is still good or not depends on whether the house you buy is a "high-quality and safe asset."

Yes, of course I want to buy it.

No, you need to think carefully.

The standard of "high-quality safe assets" must meet at least two conditions: First, it is "high-quality", has stable value, and can outperform most asset categories.

The second is "safe", with little fluctuation, and appreciation can generate stable cash flow.

Space is limited, so let me make a long story short. Real estate development in Chinese cities based on the price of new houses is roughly divided into three stages: the first stage, from 2000 to 2012, when Chinese real estate was a high-quality and safe asset.

In the second stage, from 2013 to 2021, there will be differentiation. Houses in some cities are high-quality safe assets.

In the third stage, after 2022, there will continue to be sharp differentiation, but real estate in a few areas is still a high-quality safe asset.

The large number of real estate nouveau riche born during this wave of big dividends in the real estate industry all stem from the inertial thinking that everyone has become accustomed to in the past 40 years of China's rapid economic growth, China's rapid urbanization, and the rapid growth of the real estate industry.

Investments are rigid redemption products that can resist inflation.

However, in recent years, since the Central Economic Work Conference in December 2016 mentioned for the first time that "houses are for living in, not for speculation", the phrase "housing is for living, not for speculation" has become more and more popular.

7 years.

Including the recent national implementation of unified real estate registration, it is clear that the rigid belief that real estate will increase in value has been broken.

At the Central Economic Work Conference in December 2016, it was first mentioned that housing should be lived in, not speculated.

2019 was the worst year in the past 10 years, but it will be the best year in the next 10 years.

This is a sentence that was said all over the Internet in 2019. At that time, people who did not understand the economic situation thought this sentence was extremely hypocritical - it has been good for 40 years, shouldn't it continue to be good?

Then, in addition to factors such as the global economic downturn, China's industrial transformation, and Sino-US trade friction, the variable COVID-19 emerged.

Now, look back on the past three years, feel the present, and then carefully consider the sentence at the end of 2019. Is it accurate?

What about further down the road?

Can the myth of the real estate market still exist?

Is the imagination based on past experience still reliable?

Looking five years ahead, China's economic growth will be highly dependent on policies. Assuming that macroeconomic policies are "stable and proactive," we can expect GDP to grow by around 4-4.5%.

In addition, China is currently facing several current situations: the urbanization rate is close to 70%, and the range for large-scale population inflow into cities is no longer large.

Compared with 10 years ago, the proportion of China's main childbearing population aged 25-39 has dropped by more than 20%, and improvements in education and income levels are also affecting young people's desire to have children.