Jack Ma: "DON'T BUY PROPERTY!"
Ma Yun: "in 8 years house prices will have collapsed"
Recently, Ma Yun delivering keynote speech at a global summit in Hangzhou, said: "the future of the house, is like onions." He said that "in the past 8 years, China's overall property market is in a state of sharp increase." In 8 years, the cheapest thing in China may be property.
The development of anything has cyclical regularity, including the real estate market. The past year, the real estate market rose sharply again,, but as the market matured, selling land to stimulate economic growth is almost impossible. Even if the house is a special commodity, it still is a commodity, is a commodity there is the law of the market, prices rise and prices fall.
In Shanghai for example:
a 100qm apartment is about 6m RMB
You can rent it out for about 7000 RMB per month
6m RMB loan with the average 6% interest yields in 360,000.00 RMB per year
Mortgage: 30,000 RMB per month
Rent: 7000 RMB per month
Guess what, with these numbers you don't even pay a cent back on your loan. You're just keeping the loan forever.
Of course, comparing housing to prices to onions might sound a bit exaggerated, but the meaning is clear, the future of the house is ordinary demand. Not to mention the Chinese cabbage and green onions have a shelf life, just as houses do.
Ma Yun told young people do not buy a house, but can young people really afford to buy it? We feel too, young people complain incessantly, that they can't afford to buy a house. However, recent data (from Jiarong) rendered us speechless.
According to the survey, among 80s and 90s Chinese youth, the percent of housing ownership is close to 70%. Richer than China, France, the United States, Canada, Britain, Australia, Saudi Arabia, followed with only 41%, 35%, 34%, 31%, 28% and 26%. That is to say, among the young people in China, 10 of the young people, 7 have already "bought" houses.
What are they going to do with the house? I think not only to live, but because the house has "always" had a wealth appreciation function. But if Ma is right, why keep these houses? When the market stops dropping everyone who has an 'investment property' will suffer! It will be impossible to sell your house!
If Ma said 8 years later, you will regret your investment, of course, we have to understand the spirit, it's still a liveable property, but the glory days of endless rising prices will be over. 8 years is a long time. But, 8 years will soon be over, and if it helps solve the difficult problem of housing that is really great. (Unless you bought in at the top).
So, these 8 years, do you urgently need a house? If you can rent, we strongly recommend renting! After all, buying a property and renting it out can't even cover your mortgage! Young people may wish to rent as a springboard or even as a way of life.
So in these 8 years, according to Ma, house prices, being a commodity like onions, will fall back to reality. Get ready for a wild ride.
Single children everywhere, parents already have a house, and frequently one for the child already (they have their sneaky ways, everyone in China has). Their Child gets married, houses from both sides, how many beds do you actually sleep on? Parents die, the population is shrinking, more and more empty houses, who will pay property taxes? Funny? Don't think so.
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