I’ve heard many people say china is in a housing bubble, but most these people don’t supply any actual data or facts. So I just went on craiglist hong kong and checked out housing prices. They are about as expensive as living in San Francisco which is probably same as New York prices. An average hong kong studio is around $1200 usd monthly, which is around SF prices. Additionally, I checked out this other country Singapore and a crappy studio there is only $1000 usd. Many people complain about how ridiculous housing prices are in SF, yet in these populated countries there prices don’t seem to be that different. Is this the result of a weak dollar or a housing bubble?
Hong Kong and Singapore are financial centers, and I don’t think either of them (or SF for that matter) is as expensive an NYC. I’d check out prices in some second- and third-tier cities in China if you want to pursue that line of argument.
Hong Kong’s housing prices is crazy. Much crazy than in China because China has regulation restricting people access to loans for third-home purchases, and higher downpayment requirements for second-home purchases. So people in China flood to Hong Kong to buy house bid up the price. Weak dollar is another explanation.
A studio in Brickell, Miami is $950. And this is post meltdown.
Hong Kong does not have a housing bubble. They just have overpopulation, so space is expensive. If San Francisco or New York is too expensive, you can move to the suburbs. If Hong Kong is too expensive… well it’s an island, so too bad. Singapore is also a tiny island, so they have similar problems as Hong Kong - high demand for real estate, but extremely limited supply. You could argue that other cities in China, like Shanghai, might have housing bubbles. However, at the same time, the government controls the economy very tightly. They’re also not stupid - they know what happened in the US. I would be shocked if they allow a real estate bubble to burst.
Come on guys. Have you calculate China’s average available income per labor hour? OR the average income for a Chinese citizen? If you have, you’ll have no doubt that Shanghai is now having a big bubble. Most of China’s buildings are pulled down only after 20 years they built. Like my house, only 20 years and government said the area will be mapped out for a shopping center. This brings up the GDP, right? It consumes the overcapacity and housing price goes up. Ah…let alone the so called “land transfer fund” that government charges on the developer companies…all this is a chain of money, makes 2% of population to collect 98% of all wealth. To understand this problem, you need to be a Chinese. One post is far from enough.
Well, that certainly cleared things up.
daddybackstab Wrote: ------------------------------------------------------- > I’ve heard many people say china is in a housing > bubble, but most these people don’t supply any > actual data or facts. So I just went on craiglist > hong kong and checked out housing prices. They are > about as expensive as living in San Francisco > which is probably same as New York prices. An > average hong kong studio is around $1200 usd > monthly, which is around SF prices. Additionally, > I checked out this other country Singapore and a > crappy studio there is only $1000 usd. > > Many people complain about how ridiculous housing > prices are in SF, yet in these populated countries > there prices don’t seem to be that different. Is > this the result of a weak dollar or a housing > bubble? Dude, I’m not sure a quick browse on craigslist qualifies as research. Read this http://natebyrd.blogspot.com/2010/07/chinas-housing-market.html
I don’t think you can use the “limited space or island” argument to justify ridiculously high property prices. Ask Japan. Yesterday a peace of real estate in Hong Kong (Kowloon) were auctioned off for USD 2,265 Per square foot in a very average area. Immediately afterwards all properties prices increased by 20%. A bubble is difficult to predict because it implies that it will burst , when a lot of the time the prices just stagnates for a prolonged period of time.
Agreed w/ newsuper. Also, HK is very different from the mainland. You really cannot compare the two.
The average annual income for a worker in Shanghai is around 9000 USD(exclude living expenses). To have a decent house it would cost at least 200,000 USD. An ordinary person can not afford it. I don’t know if it s in bubble not? But I am sure for a Chinese citizen it’s a luxury to have car and to live in a city like Shanghai or ShenZhen
coshair Wrote: ------------------------------------------------------- > Come on guys. Have you calculate China’s average > available income per labor hour? OR the average > income for a Chinese citizen? > > If you have, you’ll have no doubt that Shanghai is > now having a big bubble. > > Most of China’s buildings are pulled down only > after 20 years they built. Like my house, only 20 > years and government said the area will be mapped > out for a shopping center. > > This brings up the GDP, right? It consumes the > overcapacity and housing price goes up. > > Ah…let alone the so called “land transfer fund” > that government charges on the developer > companies…all this is a chain of money, makes 2% > of population to collect 98% of all wealth. > > To understand this problem, you need to be a > Chinese. One post is far from enough. is this necessarily bad? sure the house may have a 20-yr life, but if you include the repairs needed on a previously unmaintained 20+ year old house, the difference is likely negligable. 2% per year to maintain a house. if you forgo that because you know your house is going to be torn down, then you save on repairs and have money to buy a new one… sure there is some minor wealth destruction, but not as much as it seems… maybe its all a big scheme to keep Home Depot and Lowes out of China!
MattLikesAnalysis Wrote: ------------------------------------------------------- > coshair Wrote: > -------------------------------------------------- > ----- > > Come on guys. Have you calculate China’s > average > > available income per labor hour? OR the average > > income for a Chinese citizen? > > > > If you have, you’ll have no doubt that Shanghai > is > > now having a big bubble. > > > > Most of China’s buildings are pulled down only > > after 20 years they built. Like my house, only > 20 > > years and government said the area will be > mapped > > out for a shopping center. > > > > This brings up the GDP, right? It consumes the > > overcapacity and housing price goes up. > > > > Ah…let alone the so called “land transfer > fund” > > that government charges on the developer > > companies…all this is a chain of money, makes > 2% > > of population to collect 98% of all wealth. > > > > To understand this problem, you need to be a > > Chinese. One post is far from enough. > > > is this necessarily bad? sure the house may have a > 20-yr life, but if you include the repairs needed > on a previously unmaintained 20+ year old house, > the difference is likely negligable. 2% per year > to maintain a house. if you forgo that because you > know your house is going to be torn down, then you > save on repairs and have money to buy a new > one… > > sure there is some minor wealth destruction, but > not as much as it seems… maybe its all a big > scheme to keep Home Depot and Lowes out of China! Have you compared the percentage of “land transfer fund” takes in the government annual revenue? Have you compared the purchasing power of citizens during these years? I would like to correct one thing, the average annual income of Shanghai is around CNY 30,000, much less than “9000 USD”. And this is only official data. Oh come on, we all know what the “statistic bureau” is. What could CNY100 buy for you? What about $100 in US? Come and see it here. And what about the price of houses? Have you looked the quality of houses here they sell for $200,000? It only has an available of 70m2! Shanghai’s GDP can be matched with NYC? NO, but the house here can!
People in Asia tend to live in a lot more cramped conditions. Therefore 4 incomes would be paying for the space that perhaps 1 working class person in the US would rent. Another thing to consider is that there is a relatively small amount of “Western” standard apartments in many Asian cities and as a result flats similar to the one you rent in NYC rent at a premium in many places in Asia. Unlike the West, where we paid developers money to build buildings that there is no demand for, Asia has the complete opposite problem. Not enough buildings to go around to an inefficient and constrained system. In fact throughout most of Asia, if you want high end anything, you can expect to be paying more than you would in most US cities. Maybe not all of them, but probably most of them. Supply and Demand. Places like Hong Kong and Singapore are some of the only places worth living for rich people representing billions of people in this region. That drives up the price. I can’t say that I’m an expert on China - which is why I’m avoiding directly answering the question. But if you are willing to lower your notches a step or two, and deal with Asian standards you’ll find prices affordable, and actually once you get over it, livable.
Jman18 Wrote: ------------------------------------------------------- > I don’t think you can use the “limited space or > island” argument to justify ridiculously high > property prices. Ask Japan. > Yesterday a peace of real estate in Hong Kong > (Kowloon) were auctioned off for USD 2,265 Per > square foot in a very average area. Immediately > afterwards all properties prices increased by > 20%. > A bubble is difficult to predict because it > implies that it will burst , when a lot of the > time the prices just stagnates for a prolonged > period of time. You obviously haven’t been to Hong Kong. Comparing the island it’s on to Japan would be like saying The Caymans and Australia are both similar islands because they’re both surrounded by water. I’d say that if there’s a bubble in HK it’s very minor. The mainland cities are another story. As someone stated above, you have to look at their regional incomes versus housing prices and there I think you would definitely have a bubble.
Also, that being said, the fact that the Chinese government openly acknowledges the problem and is taking steps proactively will most likely mitigate any shock to the system by slowly deflating the bubble, keeping growth rates down while the economy catches up. As long as the economy doesn’t experience a major unexpected setback, I don’t believe China’s bubble will be a major deal.
ChickenTikka Wrote: ------------------------------------------------------- > People in Asia tend to live in a lot more cramped > conditions. Therefore 4 incomes would be paying > for the space that perhaps 1 working class person > in the US would rent. > > Another thing to consider is that there is a > relatively small amount of “Western” standard > apartments in many Asian cities and as a result > flats similar to the one you rent in NYC rent at a > premium in many places in Asia. Unlike the West, > where we paid developers money to build buildings > that there is no demand for, Asia has the complete > opposite problem. Not enough buildings to go > around to an inefficient and constrained system. > > > In fact throughout most of Asia, if you want high > end anything, you can expect to be paying more > than you would in most US cities. Maybe not all > of them, but probably most of them. Supply and > Demand. > > Places like Hong Kong and Singapore are some of > the only places worth living for rich people > representing billions of people in this region. > That drives up the price. > > I can’t say that I’m an expert on China - which is > why I’m avoiding directly answering the question. > But if you are willing to lower your notches a > step or two, and deal with Asian standards you’ll > find prices affordable, and actually once you get > over it, livable. +1
daddybackstab Wrote: ------------------------------------------------------- > I’ve heard many people say china is in a housing > bubble, but most these people don’t supply any > actual data or facts. So I just went on craiglist > hong kong and checked out housing prices. They are > about as expensive as living in San Francisco > which is probably same as New York prices. An > average hong kong studio is around $1200 usd > monthly, which is around SF prices. Additionally, > I checked out this other country Singapore and a > crappy studio there is only $1000 usd. > > Many people complain about how ridiculous housing > prices are in SF, yet in these populated countries > there prices don’t seem to be that different. Is > this the result of a weak dollar or a housing > bubble? You are wrong on the singapore studio rental! It’s going for almost US$2000 a month now! Worst of all, the location might not be in downtown. Singapore is getting a lot more expensive than before. The rental and property price have doubled (even trippled in some cases) in the past 3 years.
China has yet to turn into a high income society plus urban migration is still growing so I won’t count on a bubble soon unless the year-on-year price increase was not constantly keep in check. Hell, even the most expensive property in Shanghai is no match to Mumbai.
Additionally, > I checked out this other country Singapore and a > crappy studio there is only $1000 usd. Exactly…it’s crappy and its probably located far away from the CBD or other happening areas. I stayed about 30 mins away from CBD and the apartment that I stayed in with 2 other guys costed about SGD 3,500 a month. It’s probably even more right now. Plus that 1,000 was probably an HDB which are government owned buildings that get subsidies.