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Average NYers are earning 60k USD per household. So the million dollar apartments in Manhattan are not a bubble? You may say a lot of rich people are buying in NY for investment. But it is the same in Shanghai. The richest Chinese are buying. Why the investment in china is called a bubble while the same happening in NY is not called a bubble.
You specifically asked about Manhattan, not New York City as a whole.
Manhattanites make far more than the median New York City income, which is about 60,000 USD.
As I said, in Manhattan you are middle class as a single person making six figures (100K+), as a family of four you need to make at least 200k.
...You do realize that Manhattan is only one out of five boroughs of NYC, right??
there are no 600m skyscraper in China so far. Stop the nonsence.
NY and London are pricier than SH or BJ. why that is not a bubble. Westerners are so stranger and ignorant. Average NYers are earning 60k USD per household. So the million dollar apartments in Manhattan are not a bubble? You may say a lot of rich people are buying in NY for investment. But it is the same in Shanghai. The richest Chinese are buying. Why the investment in china is called a bubble while the same happening in NY is not called a bubble.
Not very smart are you.
There are four 600m+ towers in china.
Shenzhen tower
Shanghai tower
Wuhan tower
Tianjin
And there are lots more with approval that will be built this year
expected salary of a new university (a good one) graduate in Shanghai: about $500-800 a month.
expected salary of a mid career professional with 5-10 years of experience: about $1000-$2000 a month
Yes, there are people with very high income, but the above numbers represent the overall income level in Shanghai.
Yeah, same numbers I have seen for places like Guangzhou, as well- even though new condos are going for hundreds of thousands of $$. That is not sustainable- you can't have housing prices as high as they are in many American cities (if not even higher) but yet have income many times lower- that means only the top sliver of society being able to afford everything that is being built. And sure the middle class is getting richer, but those income levels will take a LONG time to reach levels where those home prices are affordable- and that is assuming home prices don't go up any further. There will almost surely be a bust- but we just have no idea when that would be.
Reality is this, if the property prices of Shanghai was cut to 1/10 overnight, then 100 million Chinese would try to move into the city leading to a massive price increase. Looking at average graduate salaries is meaningless, because they are not the people buying those properties. The people buying those properties are rich people across the country. High prices does not mean a bubble, a bubble comes when the foundation of the high prices is based on the belief of a further increase in prices. If there is real demand, then it is not a bubble.
In fact salaries have increased faster than property prices, while in America it was the total opposite. Its just the reality that when the salaries go up, then people will spend more of that money on housing. China does not have a housing bubble. What China has is too expensive housing and more houses need to be built so that people can find affordable places to live. There are places with empty apartments, but they are mostly in the suburbs where people are waiting for public services such as schools, public transport and hospitals to become more adequate. Every single year more and more people move to those areas. The example about apartments in the middle of nowhere is not a problem. It just shows that some property developers are morons.
The articles you cite are really old.
And the economist graph does not state any dates either besides 2008 q1, the year that the US housing bubble popped, causing the global financial metldown.
Since most of these graphs are a year to year comparison, it is likely from Q1 of 2009, yes? During the height of the crash.
Not a valid comparison in 2014.
And also, I thought that China's real estate is not market driven.
Here are recent articles that do imply a bubble. For any denying one there are several that say the opposite.
The articles you cite are really old.
And the economist graph does not state any dates either besides 2008 q1, the year that the US housing bubble popped, causing the global financial metldown.
Since most of these graphs are a year to year comparison, it is likely from Q1 of 2009, yes? During the height of the crash.
Not a valid comparison in 2014.
And also, I thought that China's real estate is not market driven.
Here are recent articles that do imply a bubble. For any denying one there is several that says the opposite.
The point of the articles was to show you that people have always been predicting housing bubbles for China and they keep being wrong. Hence, linking to newspaper articles will do you no favours, they were wrong in the past and they are wrong today.
And I don't think you are able to read the graphs/charts right. The graphs goes from 2005 - 2013 for Shanghai and 2011 - 2014 for China as a whole. The chart shows the increase from Q1 2008 to 2013. Any influence from the crisis would just make China's numbers look worse. I really don't think a 3.5% yearly increase in prices is a big deal when inflation is on average 4% and wages is increasing by 10% a year.
Ok.
Thanks for the extra info.
However, the economist article and the source of your graph you linked says at the bottom that:
"Fears grow of a bubble in China, led by overdevelopment and low occupancy. According to The Economist’s index, based on official figures from 70 Chinese cities, prices increased by 8.7% in the year to November 2013."
Obviously they read different information out of it than you do -- prices increased almost 9% in 2013, definitely more than 3.5% average that you claim.
One of the discussions here was that there is overdevelopment (ghost towns) of overpriced property that are empty, bought up by people, exactly as you say, rich Chinese people as investments, assuming that prices will go up.
How is this real demand??
Nobody is building the low income housing, since they will not sell for as much although developers know that there is real demand for those. Why would you if the rich will buy the pricier ones blindly.
I do not see your "real demand=no bubble" anywhere in this picture.
Of course I know Manhattan is just small portion of NYC. Also, I am not comparing entire Shanghai to Manhattan. The price in the best locations in shanghai is high. The price in the far outskirts is still affordable. I don't think you guys know a lot about shanghai when you talk about the property market there. It is very funny.
Quote:
Originally Posted by Tdiva
You specifically asked about Manhattan, not New York City as a whole.
Manhattanites make far more than the median New York City income, which is about 60,000 USD.
As I said, in Manhattan you are middle class as a single person making six figures (100K+), as a family of four you need to make at least 200k.
...You do realize that Manhattan is only one out of five boroughs of NYC, right??
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