The Beijing (and Chinese) property market is bubbling wildly. It’s hard to see anything other than some kind of calamitous cooking disaster. We have been looking at places and were thinking of buying (we’re talking a cupboard here, 40 – 60m2). But we’ve been scared off. Prices have nearly doubled in two years. When I arrived in November last year, there was a new block across the road in Tongzhou (10 miles out from the centre) with prices at 13 – 15000Y per m2 (about £1200 – £1400). Now it’s at 26000Y, four months later. When you consider a middle income salary here is around 3000 – 5000Y per month, it seems unsustainable. There is also a lot of speculation – a lot of these new flats remain empty, with people never moving in, or even decorating (sometimes you buy a new flat, you get a shell – you have to put in all the fittings, tiling, secondary plumbing, floors yourself). They just sell the empty, unused flats on later when the price has gone up. Mostly done on credit. The rent to value ratio is incredibly low, you can’t make anywhere near your mortgage payments back by renting out. Its all driven by the rising market, profit potential and credit, plus the fear, if not mass panic, that if you wait too long, house prices will run away and it will be too late. Its a frenzy!
The government grow ever richer from the sale of land, while peasants are bought off to clear out so their houses can be knocked down. Developers bypass rules to build quickly. Cities expand. Maximum lease time is 70 years.
Its got to end in tears.
But then they said that about London ten years ago.
The government has recently brought in measures to reign in the property market…. slightly. If there’s no crash, then Beijing and Shanghai will end up the most expensive places on Earth, for sure.
We are going to save our money, not buy.
Renting is a pain though.
(Click on the article to see it bigger)
And if anyone can read Chinese, here is a funny poem about property prices: