Author: banksbrave

let's discuss housing price in China [Copy link] 中文

Rank: 8Rank: 8

Post time 2006-9-18 11:45:57 |Display all floors

Lower cost housing can be had....by

....(1) Land cost subsidized by profits on the higher cost apartments or housing.

(2) Use of cheaper but quality construction materials. For example, your normal Bricks and cement construction uses a lot of labour but uses a lot of cheap clay brick or sand brick fillers.

ON the other hand, we can use FORM FIT construction with sand, rocks as fillers.

This is a system invented in high labour cost, in Australia...i think?

(3) Low cost house does not mean "low quality".....major cost of construction is land cost, labour cost.....construction material..at least in Malaya is less than 15% of the total selling price!


Green Dragon
Just an idea

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Post time 2006-9-18 12:07:45 |Display all floors

A rise, and then a levelling, with falls in some areas.

As China is continuing to urbanise (people from the country moving to the cities) there will be continual upward pressure on prices for some time to come. Also, the differences between locations in the big cities, and the levels of quality available are very limited.

Both those things create rising prices.

BUT

Eventually the urbanisation pressure will cease. Perhaps in 8-10 years time. At that time, there will also be many "levels" of quality in available housing (unlike now where there are really only three levels of quality).

Once that stage is reached, house pricing becomes about three things: location, location, location.

Apartments which are close to transport, and convenient to the business districts of a city will likely level off at a very high price.

But I imagine that there will be falls, some quite sharp, in property that is not well located and that is of poor construction quality -- which unfortunately includes most of the apartment buildings being built today in Beijing and Shanghai and elsewhere.

So -- look for apartments that are well constructed, and near where a subway line will be built in future, and you will probably avoid drastic price falls.

But if you buy apartments that are far away from transport, etc. and that are poor quality construction, then do not expect prices to rise forever.

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Post time 2006-9-19 09:19:17 |Display all floors

if we keep our money in pocket, it will drop

whether the house price will drop or not ? it's uncertain.
although central government and central departments published many policies to keep house price from increasing. but the effect doesn't meet their expectation. why?
are these policies not too strict? the answer is no.
there are many reasons to cause this phenomenon.
at first, local governments don't try their best to implement the central government and central departments 's policies. on the contrary, local governments take every possible means to keep the house price rising or not droping at least as much as possible,because  their benefits tightly relate to the increasing or decreasing house price. take shanghai for example, the local social security bureau offers  property companies more than 7 billion yuan.obviously, it can explain why shanghai local government doesn't take strict means to depress the house price.
second, most house property companies and most medias advertise or advocate the false information. all their try is to make people create an illusion the house price can not drop in the future. on the contrary, it will rise largescalely.
third, people's psychology give  the house market and property company access to bogus advertisement or advocation. it's true, everyone do want to buy a new house, have better living condition. but if we believe it is a fact, we are cheated and fall into the trap which property companies, medias even local government set.
what can we do to fight against  rising house price?
as long as you know the principles of market economy, you should know the  facts that there is need, there is a market, and every company needs fund or investment to keep their programes going on . if their capital chains are cut, they have no choice except for decreasing price.if there more and more people keep their money in pocket instead of giving it to property company. i think the price will drop.

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Post time 2006-9-19 09:48:02 |Display all floors
Originally posted by fogful at 2006-9-19 09:19
whether the house price will drop or not ? it's uncertain.
although central government and central departments published many policies to keep house price from increasing. but the effect doesn't m ...
It’s true ,if all of us tighten our pocket ,the house price will certainly drop

But how many people will tighten their pockets ,I think there’s a few compared to those who want to buy .

If you now have one apartment ,you need not to buy another one .

but there’s too many people need a house to live in ,and there’s only two choices ,buy or rent .

in spite of buy or rent ,they need to pay off , then they would rather to buy than rent, for in Chinese mind ,buy house is also a kind of investment and rent is consumption .

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Rank: 8Rank: 8

Post time 2006-9-19 13:51:28 |Display all floors

It might not be a good idea to let property price fall!

Property is almost 50% of the wealth of the people.
Letting Property price fall will destroy wealth.....
and the possibility of building even bigger cities faster!

What we can do is to provide "cheaper housing" in satellite suburbs!
and then let the price of the property appreciate.

Imagine MR. ZHANG, aged 30....

He earns Rmb80,000 a year...and buys a property worth Rmb330,000!
He pays Rmb30,000 a year to repay a Rmb300,000 mortgage!
He supports the BANK, Construction company, Real Estate developers (who markets the homes) and owning a home means, he needs to buy FURNITURE, INTERIOR DECORATORS, kitchen, electrical and electronic products....

thus creating more city business....
His home increase in value to Rmb360,000 the next year...
His income still Rmb80,000 but in actual effect, it has become Rmb110,000 income with almost Rmb30,000 tax free increase in his income....and Mr. Zhang feels rich.....and have a sense of happiness!

Then new REAL ESTATE developer build another batch of Rmb300,000 homes in a new more outlying area...which has cheaper land
and more people buys, earning income from consumers like Mr. Zhang!!!

In about 10 years time, Mr. Zhang income increases to Rmb120,000....his property now is worth Rmb600,000...appreciate Rmb300,000..and he uses his savings to pay off the remaining mortgage of probably Rmb100,000!!!..


Mr. Zhang now has 2 children and a pretty fat wife.....
So he buys an investment income in the CITY CENTER....
a smaller home.......Rmb1.0 million and borrow Rmb700,000.....complete with swimming pool etc....and rents it out to a Taiwan Expatriate family for Rmb6,000 a month

His repayment now becomes Rmb100,000  a year, 70% financed by the rental and the remaining 30% from savings! He still has SAVINGS in the City Provident fund which has invested money in MUTUAL funds....


When Mr. Zhang reaches 55! He becomes semi retired and now spends time on CD BBS and find its fulfilling in helping the motherland grow with some of his input!
He has his 1st apartment, now worth Rmb800,000...
and his CITY CENTER investment home, now worth Rmb1,500,000
and his PROVIDENT FUND pays him Rmb500,000....

and his income is now solely from rental Rmb120,000 and interest from his provident funds cash...Rmb20,000......


Green Dragon
God Of Prosperity

note: its better to build cheaper homes in lower cost satellite town....

[ Last edited by greendragon at 2006-9-19 02:03 PM ]

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Post time 2006-9-19 13:58:29 |Display all floors

...and suddenly Mr. Zhang realized...his old home is now is part of the

...metropolitan or city center....

and new city citizens begins to ADMIRE Mr. Zhang intellgent investment plans.

Ah! We need good quality REAL ESTATE DEVELOPER...lar..
who understand SIMPLE ECONOMICS!

HA HA HA


Green Dragon
God Of Prosperity

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Rank: 4

Post time 2006-9-19 14:52:44 |Display all floors
i have little idea about the housing price,i think the key is to analyse the components of  the house's cost,if the housing price is drivend by land price,labour cost,construction materials,i'm sure it'll keep the growing trend as the  Chinese economy still expand rapidly.but,as someone point out,the lack of powerful regulation and nonstandard exchange create big bubble in the real estate industry .our government should enforce management,regulate the market order to control the housing price.

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