What is the impact of falling house prices?

(1) The influence of the developer. Real estate development is very expensive, and developers are willing to invest a lot of money because they can get more income. However, if house prices suddenly fall now, developers will fall into a difficult choice. If you continue to invest in development, you may lose more, but if you turn into an unfinished building, you will not only lose money, but also smash your own signboard.

The bank has a lot of bad debts. Developers will take bank loans when building real estate, and buyers will also consider bank loans when buying a house. So it can be seen that the capital of banks in the property market is very huge. If the house price drops sharply, developers will inevitably have no money to repay the loan, and buyers will also choose to abandon the house and cut off the supply. Eventually, the bank's bad debts increased sharply, and the bank went bankrupt or closed down.

(3) Economic development is relatively poor, and real estate has become the country's first pillar industry. It has been driving the rapid development of various industries. If there is any trouble in the real estate industry, it will inevitably bring visual impact to other industries, and then affect the economic development of China.

Click to view: What is the impact of falling house prices?