I bid farewell to my first home in the biting wind of the Winter Solstice of 2024. Standing in the courtyard, feeling the chill from the water features, I couldn’t help but cry.
The beginning of a dream
Back in February 2021, the real estate market in Ningbo was booming. My parents wanted to provide me, a 23-year-old recent graduate, with a sense of “security.” Under the restrictions on new home purchases in Ningbo, we secured a pre-sale property through a lottery. The unit price was just over 20,000 RMB (approximately US$2,765) per square meter, totaling 1.82 million RMB (approximately US$251,525). We made a down payment of 600,000 RMB (approximately US$82,920) and took out a loan of 1.22 million RMB (approximately US$168,604). In 2022, as I continued my graduate studies, my father covered the monthly mortgage payments of around 9,000 RMB (US$1,244) at an interest rate of 5.6 percent for three years. By this year, the monthly mortgage had decreased to about 7,300 RMB (US$1,009).
A harsh reality sets in
The house was handed over in June 2023. By then, the price per square meter had dropped by 5,000 RMB (approximately US$690) from the initial launch price, with the new price at 15,000 RMB (approximately US$2,070) per square meter. In December 2024, my parents and I went to the bank with the property deed to inquire about a mortgage. The market valuation of the house had plummeted to just 820,000 RMB (US$113,325). The same development still had new units for sale, with similar layouts and standard floor levels, priced at 900,000 RMB (approximately US$124,380).
The burden of a negative asset
After three years of diligently paying off the loan, we still owed the bank 1.14 million RMB (approximately US$157,550). The property had become a negative asset, with liabilities exceeding its value.
Throughout these three years, we have always intended to live in the house and have never considered selling it. We naively ignored the market fluctuations and continued to pay the mortgage peacefully. However, the market crashed dramatically in the second half of this year. After two months of anxiety and sleepless nights, we finally decided to sell it.
Letting go and moving forward
Yesterday, it was sold for 770,000 RMB (approximately US$106,235). Since it hadn’t been two years since the purchase, after paying a 50,000 RMB (US$6,910) value-added tax and the agency fee, we were left with about 710,000 RMB (approximately US$97,120). Including three years of interest totaling 200,000 RMB (approximately US$27,640), deed tax, maintenance fees, and property management fees, the total loss amounted to 1.4 million RMB (approximately US$193,480). After selling, we still owed over 400,000 RMB (approximately US$55,280).
It’s incredibly challenging for ordinary people. We weren’t speculating on property; we just wanted our own home. Yet, this is the outcome we faced. Some might say: “If it’s for self-use, why not keep it regardless of the market?” However, it had become a negative asset, losing 1 million RMB (approximately US$138,200) in three years. Should I continue paying high interest for a chance that may never come to “recover” the loss? A stagnant market means continued depreciation. If I repurchase it for 700,000 RMB (approximately US$96,740) three years later, wouldn’t the interest accrued over those three years be another loss? Therefore, holding onto a negative asset for personal use is a waste.
A new chapter for someone else
Last night, the deal was finalized. A 19-year-old girl and her mother took over the property. They made a 15 percent down payment, acquiring it for 120,000 RMB (approximately US$16,585). The total price of 770,000 RMB (approximately US$106,235) is roughly equivalent to my down payment three years ago. I felt dazed at the signing center, but I congratulated them.
The times have shaped this situation. A speck of dust falling on ordinary people becomes a mountain. We missed the right real estate timing and had to swallow the bitter pill of debt. The dust has settled. There’s no point dwelling on it; it’s all ephemeral.
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