Why are house prices so high in China
For white-collar workers, the house is a headache. Only in front of the house can they know the smallness of being a common people. It takes generations of efforts to have a stable nest. I'm afraid no economist or prophet in the world can imagine that a house can condense so many seemingly unrelated elements. However, with crazy house prices and unreasonable regulation, industrious and smart Chinese people continue to create new economic phenomena and consumption behavior, joking as "forced". Therefore, for the purchase of various "demand models" such as mother-in-law house, school district house, investment house, improved house and just needed house, there is always one you need, which is the demand basis of Chinese style house purchase.
Chinese style house purchase - buy a house before you get married
The construction cost of the house is only 1500-2000 yuan / square meter, which is less than one tenth of the sales price of tens of thousands of yuan! So house prices are really outrageous, but why are house prices so high?
China is in a typical stage of dual economic development
Story background
The background of this huge story is China's "dual economy" structure. In 1979, the first black man won the Nobel Prize in economics. His name was Lewis. He was commended for his great contribution to the study of economic problems in developing countries. His dual economic theory explains and predicts the laws and contradictions of economic development in developing countries. China is a typical example of "dual economy"!
With the invention of the steam engine, Europe has entered the industrial era, while other countries are still in the agricultural civilization dominated by agriculture. With the maturity and expansion of European industrial civilization. And the comprehensive development of transportation capacity and information technology; Industrial civilization began to be imported into colonial or semi colonial areas. Compared with the traditional agricultural economy, industry obviously has higher production efficiency and profits, and will have higher income for workers. In the traditional agricultural society, there are a large number of idle and semi idle labor force, various other production factors and huge market. Therefore, the introduced industrial economy is like a sponge placed in a pool to absorb the surrounding water, absorbing the means of production in the traditional agricultural economy - capital, labor and land, and gradually transferred to the industrial economy.
China's "dual economy" structure
Industrial economy is imported from outside, so they generally fall in the coastal areas with developed transportation. With the development, new factories are constantly established, more and more capital is invested in industrial production, the traditional agricultural economy is constantly inclined to the industrial economy, and the agricultural population is constantly attracted to factories and office buildings! These coastal areas that have introduced industrial economy have become an "enclave", attracting people and resources from all over the country to concentrate in these places; This has led to the imbalance of economic development and the excessive concentration of economy and population. Unlike the "unitary economy" in western countries, because the economy is endogenous, there is no such a big gap in different regions. There are no problems under the dual economy of developing countries! The house price is the most conspicuous one!
Hard pressed hard needs
1、 Hard pressed hard needs
China's dual economic structure makes most of the job opportunities concentrated in a few small areas (enclaves), which makes people run with their jobs and houses. They are forced to choose to marry, have children and settle down in these "enclaves". China's traditional culture of "home ownership" means that you must have a house if you want to live a decent life! Therefore, even if the house price is higher, young white-collar workers are still willing to empty the savings of generations for a house! It's very flexible for office workers in this area! That is the so-called rigid demand; Love to buy, do not love to buy. The scarcity of land is the basis of high price, and the low elasticity of rigid demand can be accepted even if the price is higher! These are the two foundations of high house prices.
China's population structure in 2013:
China's population structure in 2013
According to the "post-90s" classification, there are 160 million, 230 million, 215 million, 228 million, 178 million and 146 million people in China after 50, 60, 70, 80, 90 and 00 respectively, of which the post-60s, 70s and 80s have experienced rapid population growth. In the past 10 years, in the context of China's rapid economic growth, the post-60s (230 million) with the largest number are at the peak of their career. Although they have caught up with the era of welfare housing distribution, their demand for improvement and investment is very strong; After 70 (215 million) failed to catch up with the welfare housing distribution, they had to enter the real estate market for the first time; The relatively large number of post-80s (228 million) have entered the marriage age one after another. Most of them have to separate from their original families and re form families, which has brought huge potential demand. The superposition of these factors has led to explosive growth in real estate demand in the past decade.
The local government has reason to hope that the house can be more expensive
2、 Land Finance
China implements a two tax system in which local tax and national tax are separated. Half of the tax belongs to the central government and half to the local government. The land transfer fee is fully included in the local fund budget management, which is the "money bag" of the local government. Data show that in the past 10 years, with the continuous rise of land transfer fees around the country, the proportion of national land transfer revenue in local fiscal revenue has increased from 16.6% in 2001 to 48.8% in 2009. In 2009, the land transfer revenue was 1423.97 billion yuan, an increase of 43.2%. At present, this proportion has exceeded 50%. Visible local dependence on land finance! This also determines the performance and promotion of officials; Therefore, the local government has reason to hope that the house can be more expensive, so that the land will be more valuable.
Macro-control has little effect
Land is a state-owned asset and is controlled by the government. Houses need land to have local construction. In fact, the government controls the supply of houses through the supply of land, so the real controller of the real estate market is the local governments everywhere!
Real estate oligopoly market
3、 Oligopoly
There is such a phenomenon that every fall does not fall, and every rise will rise. When the market situation is poor and the house cannot be sold, the price will fall according to the market law, but the real estate developers collectively insist on not falling, do not sell if they can't sell, and wait for the market to improve. And when the market improves, everyone goes crazy together! As a direct result, house prices have risen all the way. If there is a bit of trouble, developers will raise prices as a reason.
If it is a completely free competition market, the profit seeking instinct of economic man will make the price rise and fall. When it can't be sold, it will be sold at a lower price. When the supply is in short supply, it will be sold at a higher price and produce more at the same time. However, the real estate market is an oligopoly market between complete competition and monopoly. Oligarchs unite to control the market, and the imperfection of Chinese law makes this kind of combination have loopholes and lack of supervision. Local governments will even encourage joint control of the market for the same purpose. Therefore, the real estate market is a market manipulated by the government and developers in order to raise the price of houses, the appreciation of land and the hard needs forced by joint exploitation!
Real estate speculation group gathered
4、 Real estate speculation group
Another important participant in the real estate market is those who fry houses. Chinese houses not only have the function of living, but also have the attribute of finance. Various speculators directly promoted the rise of house prices.
After more than 30 years of rapid growth, China has accumulated huge wealth. These riches need to find a way out; It is not a good choice for banks to generate interest, invest in industries and invest in financial markets (stocks and securities), and it is the stupidest to let banks generate interest; Industrial profits are getting lower and lower; The stock market is a capital black hole, a big scam! In contrast, real estate speculation is profiteering. House prices are rising and have never fallen. Real estate speculators have made money. When there is no better way out for capital, the best choice to invest in real estate. The entry of these huge amounts of funds directly promotes the continuous rise of house prices!
Real estate speculation group is also a reason for the high house prices
Lever principle of real estate speculation
Archimedes said 2000 years ago: give me a fulcrum, I can pry the earth! Small thrust can be transformed into huge energy. It can be seen that the power of lever is amazing!
The real estate speculation group is profitable or even profiteering because it uses the leverage principle. Before the regulation of the housing market, you only need to pay 20% down payment to transfer ownership, and there is no limit to the number. Assuming a house of 1 million yuan, with a down payment of 200000 yuan and an annual interest rate of 6.5%, the interest he pays back every year is about 50000 yuan and 100000 yuan in two years. If the house price rises by 30% (actually more) in the past two years, the house will appreciate by 300000. The investment capital of 200000 yuan plus interest will double the income in two years, which is definitely a huge profit! And the house can also be used as a mortgage to lend more money from the bank to speculate. Therefore, under the role of the bank's capital leverage, real estate speculation is an absolute profiteering!
People who are interested in buying houses are concerned about the price and value. These speculators do not need to worry about how high the housing price is and how big the bubble is. They only need to be confident that house prices will continue to rise in the next few years.
House prices have been rising
5、 Self realization of expectations
"House prices have never fallen", which is an important reason why many people buy houses or invest against high house prices! With the rapid growth of China's economy, house prices also rise with the tide. For the market - confidence is very important, and the expectations of the market can often become a reality. It is precisely because house prices have never fallen that leads to the expectation of rising house prices, which has become the reality of rising house prices.
Grey income of officials
6、 Grey income
In the real estate market, there is also a hidden army! It's the gray income of officials. These money can't be deposited in the bank or leave too much cash around. The good way is to buy a house, collect the rent and appreciate it. As an industry controlled by the government, they are insiders and can't understand it better. Therefore, a large part of these gray income flows into the real estate market. Unlike ordinary residents who buy houses for living, and real estate speculators who play leverage, these funds are only for maintaining and increasing value, and they are all cash. Therefore, these funds are not afraid of any high house prices, nor do they care about the proportion of down payment and whether the bank allows loans; They are the most iron "rigid needs" in the market!
The government escorts high house prices at the policy level
Because most government officials, as economic decision makers, have multiple real estate units, they naturally hope that house prices will continue to rise, which also urges the government to escort high house prices at the policy level!
When can I get a room
Conclusion: with the promotion of these forces, it is not difficult to understand why China's house prices have risen so high!