I was recently in China, real estate prices are absurdly high.
By Daniel at 21 January, 2010, 2:08 am
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
Even on the outskirts of Shanghai, within smelling and seeing distance of the smokestacks of a chemical factory the house prices were described as ‘ridiculous’ by middle class relatives.
Two curious points to ponder:
1. Many of the apartments (as mentioned above) are owned by speculators who keep the apartments empty or for their own personal use and plan to unload them later down the track for a tidy profit.
2. Many of the apartments are given to rural families, or urban families whose properties have been resumed by the government for whatever reason (usually to develop infrastructure). Most of the families receive more than one apartment and even though they aren’t allowed to sell for a regulated amount of time (I think 5 years, but I’m not sure), they often flip their apartments to speculators table.
My general impression is chaos, and if middle class families can’t afford to buy property (many of them having already bought into the property market in any case) then the only source of buyer is either the foreigner or the rural rich.
Good evidence of a bubble?
A true story from Jake Malloy
“Housing prices in China are crazy. I bought a home that I still live in today, the outskirts of Shanghai called Jiading. I bought it in 2006 for 100,000 USD (its about 200 square meters) and added 50,000USD to do the furnishings. Wife and I are looking to sell and there isn’t 1 property in Jiading that is selling for less than 10,000 RMB per sq meter…….Everyone tells me I could get 450K USD for my house……..I’m happy with 350……I’m getting nervous. I see a bubble around the corner, even though they’ve said that since I’ve moved into Shanghai (8 years ago). Nobody can even afford these homes except for the wealthy…..”
- YUYANG GUO
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
No comments yet.