In the Chinese real estate market, high-risk speculative investment methods do exist, but it is necessary to fully understand the potential risks, policy restrictions and legal consequences. The following are some high-risk options and key precautions： --- ### **1. Speculation and sale of scheduled houses (Louhua)** -**Method**: Subscribe at a low price before the property is completed, and change hands at a high price before completion. -**Risk**： -**Policy restrictions**: The transfer of scheduled houses is prohibited in many places (if you need to transfer the house after an online signature), and some cities require a real estate certificate to be at least 2-5 years old before transactions can be made. -**Unfinished risk**: The fracture of the developer's capital chain may lead to the shutdown of the project, and thunderstorms will occur frequently in some real estate companies in 2022. -**Liquidity risk**: When the market goes down, no one may take the order, and the monthly payment will be borne until a buyer is found. --- ### **2. French auction speculation** -**Method**: Purchase the mortgaged real estate at a low price through judicial auctions, and resell it after repairing the property rights. -**Risk**： -**Hidden debt**: The original owner may have outstanding property fees, taxes or private mortgages. -**Difficult to vacate the house**: Some French auction houses have long-term occupancy problems and need to be liquidated through litigation, which can take months or even years. -**Purchase restriction policy**: Legal auctions in first-tier cities have been included in the scope of purchase restrictions (such as Beijing and Shanghai). --- ### **3. High leverage short fry** -**Method**: Purchase a house through short-term loans such as mortgages, credit loans, and bridge funds, and quickly resell and arbitrage. -**Risk**： -**Capital cost**: The monthly interest rate on bridge funds can reach 1.5%-3%. If you can't get rid of it within 6 months, the interest may swallow up the profit. -**Policy risks**: Starting from 2021, many places will strictly check the illegal entry of operating loans into the property market, and the risk of withdrawing loans is high. --- ### **4. Commercial real estate speculation (shops/office buildings)** -**Method**: Invest in low-unit-price commercial projects and gamble on planned appreciation. -**Risk**： -**Vacancy rate**: The vacancy rate of shops in second- and third-tier cities exceeds 20%, and the rental return rate may be less than 3%. -**Transaction cost**: Transfer taxes and fees are as high as 30%-60% of the value-added part (value-added tax, land value-added tax, etc.). --- ### **5. Overseas real estate speculation** -**Method**: Invest in high-growth markets such as Southeast Asia, Europe and the United States. -**Risk**： -**Exchange rate fluctuations**: For example, the depreciation of the Japanese yen in 2022 will cause the dollar-denominated income of Japanese real estate to shrink by 10%+. -**Political risks**: Some countries restrict foreign purchases of houses (for example, Canada will prohibit non-residents from buying houses in 2023). --- ###**Key recommendations：** 1. **Policy red lines**: Pay close attention to the tone of the Ministry of Housing and Construction's “Housing is not fried” policy, and avoid touching the policies of sales restrictions and loan restrictions. 2. **Stress test**: Assuming that house prices fall by 20%-30%, to ensure that it can withstand the risk of leverage collapse. 3. **Exit strategy**: The average transaction cycle of real estate in first-tier cities has been extended to 4-6 months, and sufficient funds need to be reserved for the chain. 4. **Legal review**: Especially for legal auction houses and small property houses, professional lawyers need to be hired to do due diligence. --- At present, China's real estate has entered a differentiation cycle. In 2023, the price of new houses in only the first-tier cities among the 70 cities will rise slightly by 0.8%. Speculation needs to bear far more volatility risks than in the past. It is recommended to retain at least 50% of liquid assets to hedge against possible losses.