http://economix.blogs.nytimes.com/2013/01/25/a-place-that-makes-new-york-real-estate-look-cheap/?ref=economy
Before reading this article I did not think there was any place that was more expensive to live than New York City. To my suprise, several cities in China are far more expensive to live in than NYC is. It is widley known that the savings rate in China is very high. Reasoning for their high savings rate are explained through this article. It expresses that since China has a closed door policy to foregien financial service companies there is more limited space for Chinese to put their savings and so they have resorted to investing in a market such as real estate, which is a place where they expect big returns. I found this article to be relevant to the discussions that we have been having in class about saving and investing. It was also interesting to get a perpective of real-estate, saving and investing in a country such as China because they have such a vast population.
Not only the price/annual income ratio, the price itself is also extremely high in those Chinese cities. It's not unusual at all for a regular sized condo to sell for millions of US$. This of course is a result of increasing large income gap between the very rich and the rest of Chinese people, at least partially. Perhaps the global real estate bubble simply has not deflated in China yet?
ReplyDelete