According to Businessweek $1250/month combined income will put a couple solidly into the middle class of China. But, it won't buy them a house.
Not to fret, most middle class earners can't buy a house in the US either - at least not in any desirable location. My dabbling-in-real-estate wife tells me that it is a well known maxim - Sellers want too much money and buyers don't want to pay that much. China, it seems, is no different.
China invested $23.6 billion in only three months in residential development - but less than $1 billion of that went into low-cost housing. The result is rich keep getting richer and the poor to middle class simply watch.
Beijing has cracked down on real estate developers who buy and immediately sell for a profit. Downpayments must be 30% of the cost and there is a 5.5% tax on property sold within 5 years.
It is too early to tell, but it seems these new rules have had some impact. Whereas previously houses were sold to lottery winners, that phenomenon has begun to dwindle.
In any event, I'd like to tell my Chinese friends and all the middle class there that I can't afford to buy a house either where I live...but then who can buy anything in Silicon Valley?
What do you think?
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That's correct. I really don't think that china will allow a big share of people affording a house, because china, as a agriculture land(and it won't change thus fast) has a similar density with german (a pure industriell country) in the east part. Even dspite of the mega-city, there will never be enough place to build those houses!
Posted by: wolfjin | July 10, 2006 4:04 PM | Permalink to Comment