Chapter 45 Moving to second and third tier cities

Jiaxing housing prices to rise?Jinan housing prices to rise?Real estate predators have moved to second- and third-tier cities one after another... 2010 is destined to be a lively year.On the one hand, there are endless cries of falling house prices; on the other hand, rumors of real estate predators entering the second- and third-tier real estate development markets are endless.First-tier cities, such as Beijing, Shanghai, Shenzhen, etc., are economically developed and have high returns and profits from investing in real estate. Therefore, they have always been the first choice of many real estate investors.However, recently many real estate investors in Wenzhou have withdrawn from the first-tier cities and set their sights on second- and third-tier cities such as Jinan, Xiamen, and Zhengzhou.

At the same time, a report by the Wenzhou Branch of the People’s Bank of China in 2010 also showed that 60% of the surveyed companies spent 10% to 30% of their funds on purchasing non-factory real estate, because the industry is not easy to do now.Statistics show that by the end of 2010, 65% of Wenzhou capital was in the real estate market and stock market, and the biggest investment tendency of real estate investors is to enter the second and third tier cities. Instead of the first-tier cities that everyone else wants to enter, they want to go to the second- and third-tier cities that everyone wants to get out of. Wenzhou people, who have always been known for their prudence and prudence, are based on what investment philosophy do they switch to second- and third-tier cities?

I think it has a lot to do with the following factors. 1. The first-tier cities are the highest embodiment of a country's economic and social development level. Real estate investment in these places has high returns and large profits.However, investing in these places requires not only strong capital backing, but also the courage to face more intense and even cruel market competition. Otherwise, if one step is careless, the overall situation will be lost.In other words, high returns always come with high risks.Take Beijing as an example. There is only one Beijing in the whole of China, and there is only one city center in a Beijing city. All investors are attracted to it. Not to mention how much investment capital is needed and how difficult investment management is. If you want to bid successfully, you must Participate in one or more life-and-death competitions, otherwise, you can only watch others make money.

2. The profit of real estate investment is composed of actual profit and future profit. The rental income is the actual profit, and the future profit is the appreciation and value-added space of the real estate.The rapid rise in housing prices in the short term has overdrafted future profits in advance, so investors will surely become the final victims of the false prosperity of the market. The real estate market in big cities has been booming for a period of time. Although the investment space and investment demand cannot be said to be saturated, the development prospects are not as promising as before for investors.In the future, it should enter a relatively stable adjustment period.Housing prices will not fluctuate too much, and real estate investment at this time has great risks.

3. In order to standardize the real estate market, the state has issued a series of policies, first the Eight National Articles, then the property tax, and then the purchase restriction order.These stormy regulatory policies, while promoting the regulation and maturity of the real estate market, also set up obstacles for real estate investors, dampened the enthusiasm and confidence of investors, and severely damaged the real estate market in first-tier cities. From the perspective of those who have investment needs, the investment environment in first-tier cities has deteriorated significantly, opportunities and profits have been reduced, and investment space has also been greatly reduced.There is an old saying in China, "Trees are moved to death, but people are moved to life".Since staying here is at my disadvantage, then thirty-six strategies are the best policy.

4. Capital always flows to the high ground of profit, and businessmen always focus on profit.In contrast to the booming real estate market in big cities, the real estate market in second- and third-tier cities has not really formed a scale.Mr. Wang from the Wenzhou Property Buying Group said: "Imature markets often contain huge business opportunities. The future development space of the real estate markets in Beijing and Shanghai is limited. No matter how high the housing prices are, they will not go much higher. I have put the houses there Throw them all away, and prepare to enter Suzhou and Weifang, cities with greater room for appreciation. Several partners in the previous house buying group have already started trading there, and I hope I didn’t start too late.”

Setting out to second- and third-tier cities is the result of market regulation, the pursuit of interests by investors, and the performance of rational investment by investors. Take the Wenzhou home buying group as an example. They made their first pot of gold in a big city. After seeing signs of shrinking in the market, they began to aggressively attack other markets without the slightest hesitation.They say that "house prices and land prices in big cities are getting higher and higher, and investment costs and investment difficulties are getting bigger and bigger. Since it is difficult to show your skills there, it is better to work hard in small cities. No matter what city, As long as there are real estate projects with investment returns and appreciation potentials, the Wenzhou home buying group will not miss them.” So their footprints went farther and farther, from Urumqi to Qingdao, from Sanya to Daqing, and they all went sonorously and forcefully.Such courage and courage may only be seen in Wenzhou people.

In addition to the above reasons, there are also reasons why the second and third tier cities can attract the attention of investors. First of all, the real estate market in second- and third-tier cities is immature, with low housing prices, little competition, and low risks, and the investment cost of entering early will not be too high. Secondly, China's urbanization is in a rising stage. With the rollout of transportation construction and the introduction of regional economic planning, the real estate market in the second and third tier cities is getting better and better. Investment in these places has a bright future.

In addition, second- and third-tier cities are less affected by policy regulation and have a large investment space, which is conducive to attracting investors' attention. In order to promote local economic development, many local governments have a high interest in attracting investment, financing and the real estate industry, and they are also willing to attract foreign real estate investors to enter the local real estate market through some preferential conditions.A government official in Taizhou said frankly: "Financial appropriation alone can only solve the problem of food and clothing, and it is impossible to seek development. Without attracting capital, raising funds, and developing real estate, there will be no funds for infrastructure construction." Therefore, in such a multi-party interested Investing in an environment that promotes the development of the real estate market is definitely much easier than investing in first-tier cities that are struggling both internally and externally, and the income itself will also increase.

Moreover, second- and third-tier cities have many special resources, and these resources are gradually becoming the new favorites of investors. Similarly, they also expand the space for investment appreciation for investors. In 2001, Mr. Hu, a Wenzhou native who owns a large amount of real estate in Shanghai, traveled to Yunnan with his friends. When he saw that the local tourism industry in Yunnan was developing well, the local real estate prices were still in a depression compared with similar cities across the country.So he bought a property in Shangri-La and ran a hotel business.Later, Shangri-La's tourism industry became more and more prosperous, and Mr. Hu's hotel also made him a fortune.

The shopping mall is like a battlefield, so many investors enter the second and third tier markets, some lose money and some make money. I believe that when everyone starts to go, they are aiming at making money. The so-called losing money is only when the risk comes, and some places are not handled well. .So investing in the second and third tier markets, if you want to reduce the risk, what should you pay special attention to?Based on the experience of many investors, I have summarized two points, that is, to collect accurate information and find out the local situation. In many cities, regardless of their size, local governments are trying to attract investment.From the perspective of investors, finding a good investment environment is more conducive to investment and management. Therefore, it is very important to identify and collect accurate investment information.Wenzhou merchants have strong financial resources, unique vision and reputation, so many local governments and chambers of commerce are willing to provide them with investment information. In August 2002, someone recommended an investment project in Handan to a home buying group in Wenzhou. The location was good, right in the city center.The introducer's written materials said very well, saying that the project is large in scale, complete in certificates, supported by the local government, and has good investment prospects.So a group of Wenzhou investors quickly went to Handan, only to find that the situation was not the same as what was stated in the materials.I had no choice but to go back again. Real estate policies have a profound impact on the real estate market. If you want to invest in second- and third-tier cities, familiarity with local policies is a prerequisite for safe investment.Opportunities and profits brought to investors by a government that is constantly changing and those that emphasize credit and development are definitely different.For investors, investing blindly without knowing the local situation is like throwing away the lantern and walking at night. If you are blind, you may put yourself in a passive situation if you are not careful. In 2004, a group of Wenzhou real estate investors prepared to invest in a city in Heilongjiang. They planned to buy a piece of land and develop it for shopping malls.At the beginning, the investment promotion department of the government made a lot of promises in taxation and other aspects. They kept promising that Wenzhou businessmen could enjoy various benefits and greatly improve the investment environment.In order to show their importance and confidence, they also issued red-headed documents, giving Wenshang board of directors a lot of power to exercise their own powers.These promises reassured investors, so they quickly signed the contract.Later, after operation and management, their business quickly gained a firm foothold in the local area, and their profits were also very high. However, the local government also began to want to share the benefits. They kept revising the original documents and competed with Wenzhou merchants for profits. The investors did not want to compromise, so they fought hard based on reason. Some bunks in better locations.In this case, continuing to argue will only make everyone more passive. There is no way, and many investors have no choice but to withdraw from there.Every real estate investor is looking for a reliable and profitable investment project, but whether it is reliable or safe, I am afraid I have to figure it out for myself. Now, more and more investors in Wenzhou no longer regard the first-tier cities as the first choice for investment, and have begun to show strong interest in the second- and third-tier cities. I believe that the real estate market in the second- and third-tier cities will definitely develop by leaps and bounds in the near future outbreak period.