Living in China: property bubble in major cities growing larger

The property bubble in Beijing, Shanghai and Shenzhen is growing larger, with the bubble index in Beijing exceeding that in Shanghai, according to statistics released by Midland Reality recently.

Beijing leads China in price-to-rent ratio: the price-to-rent ratio is the ratio of the monthly rents to the residential real estate prices. In general, the ratio is between 1:100 and 1:200.

According to a survey conducted by Midland Reality since Nov 2009, the price-to-rent ratio of Beijing’s property has exceeded 1:546, and the figure has even reached 1:546 in some regions in Beijing, increasing 25 percent from 2008 (1:400). There are many reasons for this situation. But In Beijing, average rental prices amounted to about 2,250 yuan (around 330 US dollars) in Nov. and saw an increase form Dec. The trading volume of houses continued to rise, mainly because the city has entered a period of growth.

The price-to-rent ration in Shanghai and Shenzhen is 1:500 and 1:450 respectively.

Beijing has exceeded Shanghai in investment ratio for the first time. About 62 percent of 200 registered house buyers said they would invest in real estate if they had surplus money, while the figure is 51 percent in Shanghai.

via Property bubble in China’s major cities growing larger – People’s Daily Online.

Itamar Medeiros

Originally from Brazil, Itamar Medeiros currently lives in Germany, where he works as Lead Product Design Strategist at SAP and promotes User Experience Design as visiting lecturer at Köln International School of Design. Working in the Information Technology industry since 1998, Itamar Medeiros has helped truly global companies in several countries (Argentina, Brazil, China, Germany, Hong Kong, India, Mexico, The Netherlands, Poland, United Arab Emirates, United States) create great user experience through advocating Design and Innovation principles. During his 7 years in China, he championed the User Experience Design discipline as User Experience Manager at Autodesk and Local Coordinator of the Interaction Design Association (IxDA) in Shanghai

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