Regarding the issue of housing prices, experts, scholars and netizens in various fields on the Internet have expressed many different opinions. Generally speaking, most people generally believe that housing prices are obviously on the high side.
There is no existing formula for calculating how high housing prices are, so there is no unified quantitative standard for how big the housing bubble is.
Based on the internationally accepted housing rental-to-sales ratio (also known as the sales-to-rent ratio), it is relatively reasonable to quantify housing price bubbles.
Rent-to-sale ratio generally refers to the ratio of consumer rental housing rent to the selling price of the house. Usually what we call rent-to-sale ratio refers to the ratio between the monthly rent per square meter of building area and the housing price per square meter of building area. It can also be considered as the ratio of the monthly monthly rent to the total price of the house. The concept of house rent-to-sale ratio is one of the indicators used internationally to measure whether the property market in a certain area is running well. The international standard is usually 1:200 to 1:300, which can also be understood as 200 to 300 months' rent. That is to say, you can buy a similar house with 15 to 25 years of rent.
According to my personal statistics around 2000, the rental-to-sale ratio of Shanghai residential properties in 2000 was 1:120~1:240, which means that with 10 to 20 years of rent, you can buy a house in an area and type similar to that of a rental house. Generally, the rental-to-sale ratio in suburban areas is lower.
At that time, the rent-to-sale ratio in Wenzhou and Jiaxing in Zhejiang was about 1:100~1:120, which means that you can buy a similar house with about 10 years of rent.
Of course, some people will say that this is data from around 2000. At that time, our economic development was not so fast and people's income level was still relatively low. The data at that time does not represent the current level.
What is our current rental-to-sale ratio? According to my personal investigation, the common housing rental-to-sale ratio is between 1:480 and 1:720, which means that the selling price of a house is equivalent to 40 to 60 years of rent.
This is just the selling price. If you use a loan to buy a house, the total house price after paying off the loan will be equivalent to 80 to 120 years of house rent. This is a very scary number because it has exceeded the average life span of the Chinese people.
According to the expert surnamed Fan, the down payment for buying a house now can be supported by 6 wallets, and the subsequent loan repayments will probably affect at least two generations. It also means that one house will affect the lives of five generations, which is really very disappointing.
calculates based on this quantitative standard that if housing prices are to return to the range of usual international standards, then housing prices must fall by at least 75% to achieve this goal. Another issue that
needs to pay attention to is that after housing prices fall, rents will also fall, and then housing prices need to continue to the next iterative calculation.
If calculated according to this model, the decline in housing prices will reach a range of 75 to 80%.
Of course, housing prices in some areas have already dropped to this extent, such as Hegang, Fuxin and other cities in the northeast. Housing prices in some cities are moving in this direction.
Compared with Tokyo, Japan, the land price in Tokyo was said to be enough to buy the entire United States. However, after the real estate bubble burst, house prices still fell by more than 80%.
Many people mistakenly believe that if land prices are high, how can house prices drop lower than land prices? Flour cannot be more expensive than bread! This kind of thinking can only be a fantasy. If this logic is true, there will be no businessmen who lose money in the world?
The ideal is very full, but the reality is so skinny, and Japan's freehold land is still falling. During the subprime crisis in the United States, housing prices also plummeted. At that time, Chicago cases where one dollar could buy a villa can still be found online.
The reason why economic laws become laws is that they must be universal.
Those who repeatedly promote "our situation is different" and "pillar industries" are either deliberately confusing the public or have ulterior motives. They are just trying to achieve their own bad purposes.
There is nothing new under the sun, and the same is true for real estate.
