Chapter 146: Prediction
Translator: Dragon Boat Translation Editor: Dragon Boat Translation
Ling Xuewei smiled and said, “I’m really flattered that Mr. Lin appreciates me so much.”
“I’ll definitely try my best to make achievements. I Won’t let down your appreciation and trust.”
Lin Bai smiled and nodded. “Do your best. I believe in your ability. Since we’ve already said this, then I’d like to hear what you think about the future development of the domestic real estate market.”
Although Lin Bai had thought it over and over again, and decided that entering the real estate industry was his best choice at the moment he still wanted to hear the views of a professional like Ling Xuewei.
After all, Ling Xuewei had been working hard in the real estate industry for many years.
Lin Bai believed that her judgment would be more accurate than his.
Ling Xuewei didn’t know Lin Bai’s true thoughts. She just thought that Lin Bai wanted to take the opportunity to test her professional level.
She did not dare to be negligent. She thought carefully for a moment before she answered.
“I personally believe that the domestic real estate market has reached a critical state. It is inevitable that the growth rate will slow down or even stagnate. This state will last for at least five to ten years, or even longer.
“Over the past few years, the real estate market has been overheated. The soaring prices of houses and land have led to a large amount of capital entering the real estate market, which has greatly affected the development of other industries
“Moreover, to a large extent, it also increased the pressure on the people’s survival, causing more and more young people to not dare to fall in love and or get married
“Therefore, the country will definitely not allow the real estate market to continue its wild development and introduce new laws and regulations to regulate the prices of houses. This is also inevitable.”
When talking about the field that she specialized in, Ling Xuewei’s entire appearance had changed. She was confident and full of vigor.
Lin Bai listened carefully to her answer. He could not help but secretly admire her in his heart.
Professionals are indeed different.
Previously, when Lin Bai analyzed and weighed the pros and cons, he was only thinking from his own point of view. He was only thinking about his existing funds and connections.
Regarding the future development of the real estate industry, he only felt that the price of houses could not soar indefinitely forever. In the future, the rate of price increase might slow down, or it might drop in price. However, he could not make a clear prediction like Ling Xuewei.
Moreover, Ling Xuewei’s judgments were all well-grounded. They were in line with the laws of economic development and the national conditions. They were very credible.
Lin Bai continued to ask her, “According to your judgment, will house prices plummet after the country introduces restrictive policies? Is there still room for profit in the real estate industry?”
This was the question that Lin Bai was most concerned about.
What he wanted was not an overnight windfall, but a stable business that could be run for a long time in the next decade or even more.
What he wanted was a sense of security that would allow him, his family and friends to be stable and prosperous even if he lost the ability to predict the future.
Ling Xuewei’s answer was still confident.
“The profit will definitely decrease, and the housing prices may also drop slightly, but they will definitely not plummet.”
“Why are you so sure?”Lin Bai asked her.
Ling Xuewei said, “Because the country will not allow this to happen although many people believe that if the housing prices plummet and everyone can easily buy a house with their salary, all the existing pressures and conflicts will disappear. But that is not the case.”
“The reason why housing prices are soaring is mostly that the price of land has been rising. The cost of land acquisition for real estate companies is very high. Considering the cost of construction and sales, as well as the profits, they can only increase the price.”
“The land prices are expensive because the local governments rely on this to maintain their revenue. In some third-and fourth-tier cities, the revenue from land auctions even accounts for more than 80% of the local revenue.
“If housing prices plummet and the real estate market collapses, it means that the local governments’ finances will also collapse, and the entire society will fall into turmoil
“Therefore, the country will certainly find a way to maintain the current situation. It will not allow housing prices to continue soaring and cause more social conflicts. At the same time, it will not allow housing prices to plummet and cause the entire industry to collapse
“Many economic experts believe that there are a lot of bubbles in the current real estate market, and I personally agree with that view
“However, the impact of puncturing the bubbles rashly is too great. It is better to stabilize the situation and leave everything to time. Letting inflation slowly digest the bubbles is the safest way.”
Lin Bai followed Ling Xuewei’s train of thought and carefully thought about it. He felt that what she said was very reasonable.
He said with appreciation, “It’s no wonder that you Ling can stand out among your peers in the fierce competition in the real estate industry. Your vision and judgment are indeed not something that ordinary people can compare to. I’m looking forward to our future cooperation.”
Ling Xuewei smiled modestly. “Mr. Lin, you flatter me. You have a discerning eye. Your knowledge and vision are really far beyond ordinary people.”
Lin Bai said, “My admiration for you is sincere. Don’t say such polite words to me. I still have another question. Based on your previous judgments, how do you plan to adjust the direction of the company’s future development?”
This time, Ling Xuewei even omitted the process of thinking. It was obvious that she had thought about this question long ago.
She replied, “It’s still better to continue to take the small but refined route, maintain the characteristics, and do premium products and services.”
“The middle-end market stabilizes the fundamentals, and the high-end market earns profits.”
After all, Lin Bai had not really invested in the market, so Ling Xuewei did not answer these questions that involved trade secrets, in too much detail.
Lin Bai thought about it carefully, and felt that this development strategy was quite wise.
The middle-end market had a large demand. No matter how the country restricted purchases and regardless of how great the economic pressure was, the people who were really in need would still try their best to buy a house.
This group of people was very large, but the profits they could bring were limited.
The high-end market was the opposite. The rich were always in the minority, but the profits brought by one rich person far exceeds the profits of thousands of ordinary people in need.
Ling Xuewei’s strategy was to take advantage of both sides. She could maintain the company’s influence in the industry and also ensure the profits.
Smart.
Lin Bai had already decided in his heart that after the project of the Yunding Villa was completed, he would invest more funds in Soaring Phoenix Real Estate.
With a partner like Ling Xuewei, the future profits wouldn’t be too bad even if the entire industry was restricted by the policy.
Lin Bai now felt that the decision to help Ling Xuewei that day was the wisest decision of his life.
It was just a mere one billion yuan, but it was definitely well spent because it brought him such a sharp and intelligent partner.
In the end, it was all thanks to fate’s guidance.
If it weren’t for Ling Xuewei’s pendant, Lin Bai might not have paid so much attention to her and wouldn’t have deliberately looked into her past and her life.