China Real estate truth

The fall in housing prices in 2023 has become the most urgent expectation of the people, which has been higher than solving the problem of food and clothing for ultra-poor families, and has been more than children's education, medical care and pension. And for the real estate must decline put forward a number of just rhetorical reasons, summed up no more than three:

1. Everyone has the right to live. Houses are for living in, not for frying.

2, the house is too expensive, the rent to sale ratio is seriously unreasonable, the vacancy rate is too high, the per capita income is too low, and it will crash sooner or later.

3. Rising house prices cause rising prices and make people's lives difficult.

Indeed, when the economy overheats and housing prices are too high, it will bring higher risks to economic operation and social stability. This is also a concern for the state. Preventing financial risks and maintaining stability are the central government's priorities.

The three points summed up by the people should have little to do with the causes and purposes of regulation. Let's break it down one by one:

1. Everyone has the right to live. Houses are for living in, not for frying.

In fact, this is a false proposition. The house consists of two parts: the house and the land to which the house belongs. The house itself has only dwelling value; The scarcity of land determines the investment value of land. It is not the house that is expensive in real estate, but the land beneath it. Therefore, commercial housing has the dual attributes of investment and self-occupancy.

Ren Zhiqiang said is not wrong, home ownership does not mean that everyone enjoys the property rights of commercial housing. Residential housing is not equal to commercial housing.

2, the house is too expensive, the rent to sale ratio is seriously unreasonable, the vacancy rate is too high, the per capita income is too low, and it will crash sooner or later.

This is a big problem. Is housing too expensive? Is there a bubble?

Let us first analyze from the national income structure

An elite society that follows the "law of the jungle" determines the pyramid structure of national income.

Since it is a pyramid, the middle and low income people at the bottom of the pyramid occupy the largest proportion of the golden tower, but we should know that even if the top of the pyramid is only 10% of the population, it will be an absolutely huge number of more than 100 million, far more than the total population of most Western countries.

While Beijing, Shanghai, Guangzhou and Shenzhen, as well as more than 30 provincial capitals, these super large and large cities that have developed and grown by plundering the resources of the whole country or a province at the expense of the interests of the majority of the population, need to accommodate more than 100 million elites in the country, can we draw the conclusion that the real estate bubble is serious and the vacancy rate is too high?

When low-income people sweat it out and expect to make more than 50,000, 80,000, 100,000 a year... They may not even dream of how much wealth the elite actually owns.

Will elites panic and abandon their vast holdings of property over a mere property tax, as rogue proletarians would like to believe?

The answer is clearly no.

What can be confirmed is that house prices are not determined by the average income of the Bureau of Statistics. It's the average income of the elite.