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China Life Insurance Co. Ltd. Message Board

  • huang_yuejin_2004 huang_yuejin_2004 Mar 12, 2013 9:15 PM Flag

    China House Market

    This is explain why China house market has no bubble:
    Almost all of China's old houses have to be rebuilt. Actually China has to be rebuilt. It may takes several decades. As is well known, China is a county like North Korea 30 years ago. At that time the average living space/person is only several square meters. People can only live in the houses that belongs to the companies they work with. In 2004, the reform on house started. The reform consists of the policy that allows people buy houses anywhere. Now people have strong demand to improve their living condition. However, it takes a long time to satisfy such a huge demand. If the current good houses can only meet the demand of 20% people, it implies that the only top 20% of people have the power to buy the houses. To solve the problem, the government planned to build a huge amount of security houses and rent them to the majority of people who have no power to buy a house right now in the market. If you go to China and ask people who own houses, you will find almost all of them paid off their houses. If Chinese go to USA to buy a house, they usually pay off the house by cash when the deal is done. Chinese working in USA will pay off their houses as soon as possible (say 7 years). Actually I don't understand why American need so many years to pay off their houses. I also don't understand why American (so-called expert in economy) believe there is huge bubble in China house market. What I want to say is that if you short China's house market, you will loss every penny you have. Recently reporters ask a Chinese congress member on the house bubble based on 60 Minutes of CNBC, the man said, because the scale of USA in population is only 1/5 of China," how Songbirds know the ambition of swan".

 
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