Wen / Zhu Zhenxin is the Principal Research fellow at the Institute of Finance, and Yang Qinqin is the Senior fellow at the Institute of Finance
Summary of this set
1. Prices in the heart of China's mainland core cities are second only to those in Hong Kong, London and Singapore, and Beijing-Shanghai-Shenzhen prices rank second-fourth in the world, second only to Hong Kong, if the difference between construction and use area is excluded.
2. The price-to-income ratio of Beijing, Shanghai and Shenzhen Central City is more than 40 times, and it takes families more than 40 years to buy a common housing in a central city. The burden of buying a house is extremely heavy, which is second only to Hong Kong before the amendment and the highest in the world after the revision.
Third, prices in central and non-central urban areas of Beijing, Shanghai and Shenzhen are the highest in the world, well above the international critical point of 25, or overvalued or undervalued.
Most of the world's core cities face the challenge of high house prices, especially in Hong Kong, which is much higher than in the mainland. Prices can not be judged by simple prices, income or rent ratio, even if overvalued, not necessarily collapse, at least not in the short term.
5, we use 10 million to buy what kind of house to compare with the cities, Beijing, Shanghai and Shenzhen to buy a house to live for the lowest performance-price ratio in the world. From a global point of view, is there a bubble in house prices in China? This is a difficult question to answer. International comparison is a good reference, but it is very dangerous to compare Chinese and foreign house prices directly, because Chinese house prices are too different.
First, the basis of pricing is not the same. China's "real estate" and "real estate" are actually separate. The land is owned by the state, the household only has the right to use the land, the common residential property right is 70 years, the expiration of the term can be automatically renewed, the commercial and residential dual-use house property right is more than 50 years, need to pay a certain proportion of the land transfer fee for renewal; Foreign countries are mostly permanent property rights, such as the United States private property system, house transactions include land, property rights are permanent. This means that our house prices include only a part of the use value of the land, while foreign house prices include the property value of the land.
Second, the data quality is different. There are two main sources of domestic data, one is the Bureau of Statistics, and the other is the China Index Research Institute. Both data quality is not high, especially Bureau of Statistics. On the one hand, Bureau of Statistics only released index, there is no high-frequency absolute price. On the other hand, the data is seriously distorted. Bureau of Statistics data comes from the residential construction department's online signing price, and in order to reasonably avoid taxes, there are universal Yin-Yang contracts in large cities, and the net signing price is substantially lower than the actual transaction price. For example, suppose Beijing a set of house actual turnover of 8 million, but the general net signing price is only 4.68 million of the highest guiding price. According to Bureau of Statistics, the average transaction price for new homes in Beijing in 2016 was only about 27,999 per square meter, while the actual average price was more than 50,000. Take this kind of house price to compare and analyze, the conclusion is bound to run sideways.
Third, statistical caliber is different. There is a lack of uniform official data on global house prices, different national house price statistics agencies, different data sources and different sample sizes, which are not suitable for direct comparison. Domestic commonly used house price data is 70 large and medium-sized cities and hundred cities housing prices, sample cities are relatively large, including a variety of commercial housing types; The S & P / case Schiller house price index, the most commonly used in the United States, counts only 20 cities and only single-family and townhouses. Don't say that there is no direct comparison between countries, not even a direct comparison within a country is not entirely accurate.
Fourth, the area algorithm is different. The domestic house calculation is the building area, including the housing use area, the wall occupied area, also includes the public amortization area, the floor road, the balcony and so on all counts among them. Most countries calculate the usable area or area of use. For example, Hong Kong uses a usable area, which is equal to the part of the floor area that is removed from the shared area. The use of the United States, Britain and so on is the use area, equal to the usable area minus the wall occupied area, that is, the real usable residential area.
The relationship among the three areas is building area > practical area > use area, the difference between the usable area and the usable area is relatively small, and there is a great difference between the building area and the use area, so it is necessary to use the room rate to convert. That is, the ratio of the actual living area to the building area. Generally speaking, the occupancy rate of towers or elevators is about 70%, and that of multi-storey or elevator-free buildings is about 75%, which means that the house of more than 70 square meters in foreign countries is about 100 square meters in China. Prices in China need to be divided by the occupancy rate to get real home prices that can be compared with those of foreign countries, which is at least 30 percent higher than the original home price figures.
Fifth, the cost of holding is different. Domestic current real estate taxes and charges are mainly reflected in the transaction link, most of which are one-time costs, only real estate tax and urban land use tax are aimed at the real estate holding link, but real estate tax is currently only in Shanghai and Chongqing pilot, has not been fully launched. In other words, if not traded, China's house holds almost no cost. Foreign taxes and charges are mainly in the holding process, holding costs are high, Germany, the United States, Japan, Singapore, the United Kingdom, Hong Kong and many other countries and regions have real estate tax, need to pay during the holding period. For example, a 100-square-square house in Beijing has a property cost of only four or five thousand yuan a year, while an FLATIRON apartment near Wall Street will have to pay an annual real estate tax of $11,599 and a property fee of $8,499 a year. Equivalent to RMB annual holding cost of one hundred and thirty four thousand seven hundred yuan, holding costs are significantly higher than domestic, this part of the cost is actually implicit "house prices."
Sixth, the regional structure is different. China is a late-developing country, with a urbanization rate of less than 60% and a highly uneven regional development. There is a great difference between the urban and rural areas, between the core cities and the third and fourth-tier cities. As a provincial capital city, Hangzhou has an average price of more than 60,000. The average price of Urumqi is about 6, 000, a difference of ten times. Although there are regional and urban-rural disparities in foreign countries, the urbanization rate in developed countries is above 70%, which is not as serious as domestic differentiation. This leads to a problem that if overall housing prices are compared, China's housing prices could be lowered by some backward areas and rural areas, disguising the high prices in large cities, which are not in line with the actual situation.
Seventh, the unit of valuation is different. The house area measurement units used by various countries vary from one country to another, with square meters in China, square feet in the United States and Britain, and flat in Japan and South Korea, all of which need to be converted and cannot be directly compared. The conversion ratio between the three is about 0.093 square meters for 1 square foot and 3.31 square meters for 1 square foot.
Since the data are different, it is easy to produce systematic deviations from direct comparisons. For the accuracy of the comparison, we consider a variety of factors, determine the following principles of data processing: first, to compare with representative cities with similar development level, to avoid the inaccuracy of the whole country's comparison; The second is to take the market data as the standard to avoid the data distortion caused by the external intervention, and the third is to take the same multinational statistical organization as the standard to avoid the difference of the statistical caliber; Fourth, the combination of macro-data dimension and micro-case dimension, as far as possible reflect the real situation of housing prices; fifth, the combination of absolute level and relative level, eliminate the difference in housing prices caused by the development level differences.
Next, we set out from these principles, the distribution from the macro-and micro-perspective to compare housing prices in China and other countries.
Macro-perspective comparison: almost the highest in the world
At the macro level, we select the data of Numbeo, which is the largest online collaborative database website in the world. Through the online collaboration of users, we can update the cost of living information of countries and cities in real time, so that the data can be compared easily. To improve comparability, we selected the world's most representative core cities as samples, including Beijing, Shanghai, Guangzhou, Shenzhen, Hong Kong, London, Singapore, New York, San Francisco, Paris, Boston, Tokyo, Sydney, Los Angeles, Mumbai, Rome, Berlin, Taipei, Moscow, Chicago and other 20 cities, top-down analysis of the world's core cities of absolute and relative housing prices.
Absolute House Price: second only to Hong Kong after revision.
By comparing the average house prices in the central and non-central areas of the first-tier cities directly, we can find that the first-tier cities in China, Beijing, Shanghai and Shenzhen, have the highest average house prices, but they are among the top cities in Hong Kong. There is still a gap between London and Singapore. According to Numbeo's latest data on housing prices in the heart of the core city in February, Hong Kong is far ahead with $29147 per square meter, followed by London and Singapore, at $17532 per square meter, $16473 per square meter, Beijing, and Shanghai, respectively. Shenzhen ranked fourth, fifth, seventh at US $15292 / m2, US $14221 / m2, US $13349 per square meter respectively. Prices in Beijing and Shanghai's central urban areas have surpassed that of New York, Shenzhen and San Francisco, Paris. Tokyo and other major international cities.
It can be seen that Beijing, Shanghai and Shenzhen, the first-tier cities in mainland China, rank in the top 10, and are in a leading position in the world, compared with the world-renowned cities such as New York, San Francisco, Paris, but compared with Hong Kong, London and Singapore, which are at the top of the list. There is still a certain gap, Beijing-Shanghai-Shenzhen central city prices are about half of Hong Kong.
Source: Numbeo, as Institute of Finance: us $/ m2
However, considering that the most commonly used building area in mainland China is building area, and most of the core cities are residential buildings with elevators, a 70% occupancy rate is chosen, and after the conversion, it can be found that the real house prices in the central areas of Beijing, Shanghai and Shenzhen are 21846 US dollars / square meters respectively. Us $20315 per square meter and US $19069 per square metre have surpassed London and Singapore, second only to Hong Kong, and the gap between Hong Kong and Hong Kong has narrowed further.
Source: Numbeo, as Institute of Finance: us $/ m2
Take a look at non-central urban areas: the price gap between non-central urban areas and central urban areas in 20 core cities around the world is significant, with prices in some non-central urban areas less than half of those in central urban areas, but the overall ranking of non-central urban areas remains virtually unchanged. Only individual cities change the order. According to the latest data on housing prices in the non-central urban areas of the core cities in February, Beijing, Shanghai and Shenzhen are 7483 US $/ m2, 7213 USD / m2 and 7145 USD / m2 respectively, which is about half of the central city area, ranking sixth, according to the latest data on the Numbeo website in February. Seventh, eighth, the ranking is still top, but relative to the central city ranking has moved backward.
Source: Numbeo, as Institute of Finance: us $/ m2
Non-central urban areas are also converted to 70% of the housing rate, non-central urban areas in Beijing, Shanghai and Shenzhen are 10691 US dollars / m2, 10304 US dollars / m2 and 10208 USD / m2 respectively, second only to Hong Kong, successfully surpassing San Francisco,. Cosmopolitan cities such as London, Paris and Singapore.
Source: Numbeo, as Institute of Finance: us $/ m2
Relative house prices: the world's highest, none.
The first indicator is the price-to-income ratio: it was second only to Hong Kong before the revision and the highest in the world after the correction. It is generally used to measure the reasonableness of house prices relative to residents' income. For example, the ratio of house prices to incomes in the central urban areas of Beijing, Shanghai and Shenzhen exceeds 40 times. Numbeo uses the ratio of the median apartment price to the median disposable income of the family and the average price of the apartment in both the central and non-central areas, which means that it takes more than 40 years for a family to buy a common home in a central city. The Numbeo website uses the ratio of the median apartment price to the median disposable income of the family. The median apartment size is 90 square meters, assuming 50% of the workforce is female and net disposable household income is defined as 1.5 times the average net salary. In February, Hong Kong ranked first with 49.13 in the price-to-income ratio of central urban areas in the core cities. Beijing, Shanghai and Shenzhen ranked second, third, fourth and far ahead of other cities at 46.65, 42.60, 42.55, respectively.
Note that this has not yet been converted to a real estate rate. If we use the revised housing prices to calculate the price-to-income ratio, then Beijing, Shanghai and Shenzhen are surprisingly high, reaching 66.64, 60.86 and 60.79, respectively, far more than Hong Kong. Become the city with the highest burden of buying houses in the world.
Source: Numbeo, Institute of Finance
Source: Numbeo, Institute of Finance
The second indicator is the price-to-rent ratio: the highest in the world. Intuitively, the ratio of house prices to annual rents per square meter measures the return on investment from house rentals, which can be used to determine whether to buy a house or rent a house. Further, rents are more reflective of real housing demand, and if house prices are much higher than rents, that means there is a financial component of speculative speculation, which can be interpreted as a bubble.
The central and non-central urban areas of Beijing, Shanghai and Shenzhen are at the forefront of the price-to-rent ratio. Numbeo assumes 50 square meters for one-bedroom apartments and 110 square meters for three-bedroom apartments when estimating rent per square meter. Tax or maintenance costs are not taken into account. In the latest February price-to-rent ratio data for core cities, Shenzhen, Beijing, Guangzhou and Shanghai ranked in the top four at 81.82, 64.85, 63.27 and 58.07, respectively, while non-central urban areas ranked in the top four, respectively, at 81.82, 64.85, 63.27, and 58.07, respectively, in the central urban areas of Shenzhen, Beijing, Guangzhou and Shanghai. The critical point of international circulation is 25, which indicates that the value of real estate investment in the region becomes smaller and the value of renting is more economic than that of buying a house. As mentioned earlier, rental demand is real housing demand, some are speculative demand, the high price-rent ratio shows that speculative demand exceeds the actual housing demand, there is a certain bubble.
Source: Numbeo, Institute of Finance
Source: Numbeo, Institute of Finance
Microcosmic comparison: what house can 10 million buy in the core area of each country?
Macro data are more comprehensive, but may also mean more errors. We can make some perceptual comparisons from the micro-level, sometimes closer to reality. Micro-comparison is no more than two ways of thinking: one is the same location and house comparison of housing prices, the other is the same price to compare house. Let's combine these two approaches, from the point of view of home buyers, assuming that we have a budget of around 10 million at hand, and that investment is limited to the financial districts at the heart of major cities around the world. Then looking for a bottom-up comparison of the available house, you can also have an intuitive perception of house prices around the world.
1, Hong Kong: 41 square metres of usable area of nine million nine hundred and ten thousand and two bedrooms at the total price of nine million nine hundred and ten thousand and two bedrooms in central
Huixian, 1 Taiping Hill High Street, Central Sheung Wan, near the Hong Kong International Financial Centre, is a 12-year-old house with a floor area of 615 feet (57 square meters) and a practical area of only 443 feet (41 square meters), with a practical rate of 72%. Total price 11.5 million Hong Kong dollars (9.91 million yuan), unit price as high as two hundred and forty thousand per square meter, the world ranking top. But the overall package is more complete: first, it is convenient to transport, about 500 meters from the nearest MTR station, West Ying Pun, 15 minutes walk to the International Finance Centre, a total of a number of bus routes, less than half an hour to Causeway Bay. Second, rich in educational resources, there are 17 primary schools nearby, about 1 km away from the University of Hong Kong. Third, life is perfect, nearby Pugong Garden, Sheung Wan Stadium, Xiying Pun Post Office Children's Playground and other facilities, can be leisure and entertainment.
Photo source: central Plains real estate
London: nine million two hundred and fifty thousand and two bedrooms, 2 baths and 80 square meters for Park Vista Tower apartment in the City of London
The Park Vista Tower 2-bedroom modern apartment in the City of London, completed in August 2017, is simple and comfortable, located on the 14th floor, high-rise, with a good view, overlooking the spectacular view of London, with an indoor area of 80 square meters. The total price is 1 million pounds (about 9.25 million yuan) at a unit price of one hundred and fifteen thousand six hundred / m2. Park Vista Tower apartment is conveniently located in central London, five minutes' walk from Wapping Station, to the City and Canary wharf. Wapping has 16 kindergartens and nurseries, 70 primary schools, 16 secondary schools, 7 special schools, 19 private schools and two universities at Royal Mary College and City University of London.
Photo source: European Home purchase Network
3, Singapore: ten million ninety thousand and three bedrooms, 2 baths, 112.6 square meters at Ka Royal Court, Marina Bay, Financial Centre
Singapore Ka Royal Court 3 bedrooms 2-bathroom Superior apartment, completed in January 2018 new house, fine decoration, house area of 112.6 square meters, the total price of 2.11 million New dollars (about 10.09 million yuan), unit price is 89,600 / square meters. Jiayuyuan apartment convenient transportation, located in the central core of the third post area, 5 minutes drive to the shopping area of Wujie road, 10 minutes walk to Hongshan subway station (Redhill), station 4 subway to the central business district CBD, Nearby Elizabeth Hospital, facilities around the project are complete, walking from the park to Marina Bay Garden. Education is rich in resources, including Alexandria Primary School, Queen Town Primary School, Yam Yung Shing Primary School, Ke Hsin Nu Middle School, Hongshan Secondary School, National University of Singapore, Singapore Institute of Technology, Singapore University of Management and other universities.
Photo source: Lianjia
4, Shanghai: the total price of Shimao Binjiang Garden near Lujiazui is nine million five hundred thousand and one rooms, 2 rooms, 85.07 square meters
Lujiazui near Shimao Binjiang Garden 1 room 2 hall, completed in 2009, fine decoration, full five not only, construction area of 85.07 square meters, total price of 9.5 million, unit price of one hundred and eleven thousand six hundred and ninety nine / square meters. Shimao Binjiang Garden is located in the inner ring of the core area, there are four subway and four bus lines through, of which the nearest line 9 Shangcheng Road about 1000 meters, a station subway to Lujiazui Financial Center, There is a large-scale Grade 3A General Hospital, Shanghai Oriental Hospital, within 2 km nearby. High quality education resources, Pudong New area Pearl Primary School, Puming Teachers affiliated Primary School and other key primary schools. Life and entertainment are complete, less than 1000 meters away from Shanghai's first eight hundred partners business circle.
Photo source: Lianjia
5, Beijing: financial Street Jinghua District total price of ten million and one bedrooms 78.24 square meters
Financial Street West City Jinghua District refined decoration one-bedroom, completed in 2008, two not only, the construction area of 78.24 square meters, the total price of 10 million, unit price of one hundred and twenty seven thousand seven hundred and ninety nine / square meters. Jinghua District is located in the second Ring Road, less than 800m from Financial Street, the west gate of the district is a bus stop, there are three bus lines passing through, to the west there is Metro Line 2 Fuchengmen Station, to the east there is Metro Line 4 West fourth Station and Lingjie Hutong, no more than 1000 meters. The surrounding educational resources are rich, and there are experimental second primary kindergartens (well-known kindergartens), secondary schools attached to Beijing normal University (the first batch of key secondary schools in Beijing), and Beijing eighth Middle School (Beijing demonstration key secondary schools). Central Conservatory of Music (China's highest music institute) and other key schools. Complete peripheral facilities, good medical conditions, Peking University people's Hospital (Baita Temple District) about 500, Beijing Union Hospital West Hospital about 1000 meters. Life and entertainment convenience, the west side of the district from the financial street shopping mall about 800m, to Xidan shopping mall about 1500 meters.
Photo source: Lianjia
6, FLATIRON apartment in lower Manhattan, New York:, nine million two hundred thousand and one bedrooms, 66 square meters
New York Lower Manhattan near Wall Street, Year Nineteen Eighty-nine, a well-decorated one-bedroom apartment with a total cost of 9.2 million yuan, a 66-square-meter area, and a unit price of one hundred and thirty nine thousand three hundred and ninety nine yuan. The apartment is located in downtown Manhattan's bustling streets, on the corner of Wall Street, near Union Square Park, conveniently accessible from the 6th Street Subway and the 14th Street Subway F, M, L, Line 1.2.3 and 14th Street Subway and 9th Street Subway PATH distance of about 500m, very convenient to travel. There are plenty of educational resources around the world, with New York ranking No. 6, No. 38 New Explorations Into Science, Tech and Math High School and New York ranking No. 10, America ranking No. 61 New Explorations Into Science, Tech and Math High School and 2016 world ranking 53 New York University.
Photo Source: North American Home purchase Network
7, Shenzhen: Futian district Yasongju total price nine million nine hundred thousand and two rooms 2 hall 86.99 square meters
Shenzhen Futian District near CBD Yasongju, fine decoration, 2 rooms 2 hall, completed in 2004, the total price of 9.9 million yuan, construction area of 86.99 square meters, unit price is one hundred and thirteen thousand eight hundred yuan. Yasong is located in the vicinity of the city center, convenient to travel, within 100 meters there are three bus stations, a number of bus lines, less than 2000 meters within the range of 9 subway stations, the nearest to the north of Gangxia and the city center station about 500 meters. Surrounded by a large number of educational resources, the district with Victoria Bilingual Kindergarten, the counterpart Tianjian Primary School is a key school in Shenzhen.
Photo source: Lianjia
8, Paris: nine million two hundred and sixty thousand and one bedrooms and 83 square meters of duplex apartments in the second largest district
Hardcover repair spacious apartment, facing south, 1 bedroom 1 bath, total price 9.26 million yuan, interior area 83 square meters, unit price is one hundred and eleven thousand six hundred yuan. Located in the second largest area of the Paris Opera House, including the former Paris Stock Exchange and a number of bank headquarters, it is conveniently located, adjacent to a subway station and accessible on foot. The infrastructure is perfect and the cultural atmosphere is strong.
Photo source: European Home purchase Network
Boston: ten million four hundred and ninety thousand and one bedrooms and 83 square meters in downtown apartments
Built in downtown Boston in 2016, one bedroom and one bath, with a total cost of 10.49 million yuan, an indoor area of 83 square meters, and a unit price of one hundred and twenty six thousand four hundred yuan. Located in the downtown Downtown Crossing neighborhood, close to the landmark Millennium Tower and Boston Park, the apartment is minutes away from Boston's financial district, the nearest bus stop and subway station less than 100 meters away, and convenient transportation. Education resources are rich, including many primary and secondary schools, such as Adams Elementary School,Josiah Quincy Elementary School,Eliot Elementary School.
Photo Source: North American Home purchase Network
10, Tokyo: nine million three hundred thousand and three bedrooms and 75 square meters of Tomihisa Cross Comfort Tower apartment in Fujiucho, Shinjuku district
Tomihisa Cross Comfort Tower apartment built in 2015 in Shinjuku, Tokyo, 3 bedrooms, 1 bath, 47 floors, excellent view, Tokyo night view, total price 9.3 million yuan, room area 75 square meters, unit price is 12. Forty thousand yuan. The apartment is located in Fujiu Town, Shinjuku District. It has three stations and three routes. The nearest station is Shinjuku Royal Court Station, which is a 9-minute walk. The surrounding facilities are perfect, adjacent to supermarkets, nursery gardens, commercial facilities, etc., convenient life.
Photo source: Asian Home purchase website
[逻]conclusion
In summary, the conclusions of the comparison are clear:
First, in absolute terms, prices in China's mainland core cities are among the highest in the world, second only to Hong Kong's, New York, Singapore. Excluding the difference between construction and use area, prices in Beijing, Shanghai and Shenzhen are almost the highest, second only to Hong Kong.
Second, from a relative level, house prices in China's core cities are the highest in the world. The revised ratio of house price to income and the ratio of house price to rent exceed that of Hong Kong, and the burden of home purchase in Beijing, Shanghai and Shenzhen ranks firmly in the top three in the world.
Third, if house prices do not rise further, the current return on rents is severely low, real estate as an investment will become weaker and weaker.
Fourth, most of the world's core cities face the problem of high house prices, especially in Hong Kong, which is much higher than ours. Prices cannot be judged by simple price levels, income or rent ratios. Even if there is a bubble, it does not necessarily collapse, at least not in the short term.
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