| Is this idea stupid? | |
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| Feb 11, 2009 02:32 |   |
 | "We can't afford to buy one square meter house with one-month salary". I believe that many young Chinese people have this complaint. It reflects two questions: One is that people's salaries are very low. The other is that the housing prices are high-rocketing and unreasonable. Here exists a contradiction between salary and housing prices. A real estate developer thinks that people who have this idea are very stupid. Why should we buy a one-square house? Even you can afford to buy such a house, does this house exist?  What do you thinnk of his idea? Is the ideal above really stupid? |
| Feb 11, 2009 04:00 | #1 |
| GUEST45136 | One square meter is pretty small. Might make for a dog house but a house for people..no..too small! The smallest house...apartment..room...that i know of was in Japan.It was 4 square meters..I think? |
| Feb 11, 2009 16:50 | #2 |
| Are you speaking literally, JimmyB? Or are you suggesting that the cost per square foot or square meter for a home is more than a month's salary? An old financial rule that I was taught as a boy was the cost of housing should not exceed 25% of your income. |
| Feb 11, 2009 20:07 | #3 |
| Are you speaking literally, JimmyB? Or are you suggesting that the cost per square foot or square meter for a home is more than a month's salary? Not literally. It is a fact. The cost per square meter for a home is more than a month's salary to a large portion of Chinese people. An old financial rule that I was taught as a boy was the cost of housing should not exceed 25% of your income. Griz, this rule can't be applied in China. According to that real estate developer, he said that it was normal the housing prices are 4 to 6 times of your income. Bullshit! Take Xi'an for example, an apartment costs you 300000 to 400000 RMB. According to the statistics, the average annual income in 2007 was 25012 RMB. The housing cost is 12 times of the average annual income. It is not like what he said. |
| Feb 11, 2009 21:44 | #4 |
| I can see where GRIZ is coming from...I think. The not to exceed 25% of income is based on monthly payments +taxes+ insurance of the house if carried on a 15-25 year note at say 5% interest. The penalty for carrying the house on a note is that the total cost of the house +interest will be approximately 2-2.5 x the original price of the house. If I'm understanding JIMMYB correctly....he's looking as to how long it would take to save the cash to pay for the house or apartment on a very short term basis. If half of the salary is needed for general living expenses, then at 12x the average annual income would take 24 yrs. to save for the house or an apartment, and who knows what the prices would be then. Do you suppose JIMMYB that this is a deliberate attempt for the young couples of China to secure mortgage loans because the cost of housing is so much greater than the average weighted salaries? |
| Feb 12, 2009 04:08 | #5 |
| GUEST43239 | Maybe the Chinese will have to follow the example set in Japan.They will have to start living in apartments the size of closets because it's all they can afford.I know space is a major reason why Japanese apartments are so small but I'm sure price has something to do with it too.I have already seen apartments as small as 18 sq meters for sale In China. Property values in China are whatever the developers can get away with.Government watchdogs do not exist or give a blind eye to real estate values.After some investigation into vacant land leasing fees.I have found that developers are leasing land for as little as 500CNY/meter then putting up an apartment block at 1000-1500/meter =1500-2000 CNY/per meter total price of developement.Then turning around and selling them as Jimmyb says, for as much as 40,000 CNY.That would be a profit of 40,000 - 2000 = 38,000 CNY. I don't think the U.S housing market boom/inflation even came close to this. Real estate prices should be geared to what the market can handle and the market definately cannot handle these kind of prices.The "bubble" is ready to burst at the seams and when it blows, it's going to come down hard! Hang on to your money Jimmyb your day to buy is not far away. |
| Feb 12, 2009 20:14 | #6 |
| "We can't afford to buy one square meter house with one-month salary". It sounds like a figure of speech to me to demonstrate or emphasize how hard and expensive it is to buy a house in Beijing. Just like the expression, ‘I’m so hungry I could eat a horse,’ just to emphasize how hungry the speaker is. You can’t really buy a one-square meter house. Or rather you won't want to. I don’t think you’d want to sleep curled or standing. By the way, houses in every big cities around the world are expensive. Japan has some capsule hotels that drunk salarymen go to after the subway system has shut down past midnight and they can't go home. I think it is about 5 feet wide (probably less) and 6 to 7 feet long. About 4 feet high, so you can't stand. It's really just for sleeping but it has beddings, a radio, alarm clock and even tv inside. Shower and bathroom are shared. |
| Feb 13, 2009 03:25 | #7 |
| "It sounds like a figure of speech to me to demonstrate or emphasize how hard and expensive it is to buy a house in Beijing." You are right, SHESGOTTBE. People just want to emphasize that the housing prices are really absurd. A real estate developer thinks that people who have this idea are very stupid. Why should we buy a one-square house? Even you can afford to buy such a house, does this house exist? This real estate developer is really an idot. He misunderstood this. Nobody wanna a one square meter house. As a normal person, we all know that it can't accommodate a person. |
| Feb 13, 2009 07:39 | #8 |
| Not only buying, renting a house is also expensive in China. A three-room apartment in Shangxiajiu area, Guangzhou costs 4000RMB per month, which in Kuala Lumpur that kind of apartment should be less than 4000RMB (RM2000) in the porsh golden triangle. Ordinary family persons with a monthly income 5000RMB per month definitely cannot afford to pay that much, unless they share with friends. In Shenzhen, Xingzhou's one-room apartment is not less than 2000RMB per month. Visitors or foreigners do not feel the pinch so much in China because a Singaporean monthly income of SGD4000 is almost equivalent to 20,000RMB. He can really afford to rent such an apartment, but definitely not an ordinary Chinese mainland whose income barely 6000RMB per month. Wan |
| Feb 13, 2009 21:18 | #9 |
| If you look at what he is saying, it is that the average salary would only buy one square of a house. So he is not speaking literally when he says that you should live in a one square house, I think that he is making sense when he says that the prices are such that it is a joke to think that the average person could ever become a homeowner. I also believe that the housing bubble, which led to the lousy economy will reverse much of this, |
| Feb 16, 2009 20:41 | #10 |
| Recently, the government has issued another new policy to encourage the real estate market. According to the policy, those who buy apartments in certain places can settle down there with their "Hu Kou". Hu Kou is very important to Chinese people. Many Chinese do what they can to transfer their Hu Kou to big cities. With this new policy, their dreams might come true. |
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