Author: 468259058

Who has stolen China's middle class? [Copy link] 中文

Rank: 6Rank: 6

Post time 2011-5-13 14:42:21 |Display all floors
The rental market represent the "value base of the home"!

China is diffrent - rents are far too low because of the real estate bubble. House owners don't earn their returns with rent, they earn them with mere speculative value changes.

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Rank: 8Rank: 8

Post time 2011-5-16 13:09:11 |Display all floors

Reply #29 Everynowhere's post

A mismatch which would have to be "corrected" eventually!

The home prices = time value of the "market value" of the property + future appreciation/depreciation = rate of return of the "rental" - "expense" to maintain property/100 + % increase/reduction due to age, changing demographics, economic circumstances!

This is how a property is properly valued!

Example, in the city of Foshan, we have a "newly developed" township- and new occupants has Rmb X annual income, the population is expected to increase due to "child births", and owners income is expected to rise as the occupants skills increased - than we have a BONUS of future appreciation added to the value of the property beside the MARKET VALUE of rents achievable. (rents dependent on migrant labour, or in case of commercial properties - the retail sales per square m of rentable space!)


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