Recently, Zhuge Finder Data Research Center released the research data on the house price to income ratio survey in 2020: among 100 key cities, the average house price to income ratio will reach 13.2 in 2020.
The top 10 cities in terms of difficulty in buying a house are.
Shenzhen (48.1), Sanya (38.1), Xiamen (31.1), Beijing (30.8), Shanghai (30.7), Fuzhou (23.6), Hangzhou (21.4), Guangzhou (20.7), Tianjin (19.8), and Nanjing (18.6).
The so-called house price to income ratio refers to the ratio of housing price to annual household income, the higher the house price to income ratio, the greater the house price deviation from the income level of residents, the more difficult it is to buy a house.
For example, the house price to income ratio in Shenzhen reaches 48.1, which means that with the current income level in Shenzhen, the average resident in Shenzhen needs to go without food and drink for 48 consecutive years to buy a home. Or, starting to work at the age of 20, the average person needs to work continuously until the age of 68 in order to buy a home in Shenzhen, and without eating or drinking.
We can sort out several pieces of information.
First, Shenzhen is the most difficult to buy a home. On the one hand, it is financially developed, coupled with the soft power of society, making it one of the most desirable cities for young people. In recent years, there has been an annual inflow of about 500,000 people, creating a huge demand for housing.
On the other hand, Shenzhen itself has a small land area, with 1997 square kilometers of land accommodating a population of over 20 million. Leaving aside small property rights houses, commercial housing is extremely scarce. For example, in the first round of centralized land supply this year, the first batch of centralized land supply in Guangzhou amounted to 48 cases, while only 6 cases in Shenzhen, which shows that the supply of land in Shenzhen is tight.
The imbalance between supply and demand is the root cause of high housing prices in Shenzhen.
Second, the difficulty of buying a house in the top 3 cities have common features
1, the city area is small. For example, Shenzhen land area is 1997.47 square kilometers, Sanya 1919.58 square kilometers, Xiamen is 1700.61 square kilometers. Even Beijing (16808 square kilometers) is less than one-eighth.
- Shenzhen, Sanya and Xiamen are all cities with a majority foreign population. Shenzhen is the most dynamic first-tier city, attracting talents through an open and tolerant social atmosphere, while Sanya and Xiamen are typical tourist cities, with a beautiful environment and a livable climate that is particularly attractive. Therefore, the three places house price rise is mainly created by foreigners.
3, good air. In March this year, the national air ranking of 168 key cities, Shenzhen, Xiamen ranked in the top 20. and according to the data of previous years, Sanya also ranked in the top.
4, Shenzhen and Xiamen residents have a high degree of indebtedness. We can respond to the degree of indebtedness of a place through housing deposits – housing loans. By calculation, in 2019 Shenzhen housing deposit is 16327 billion, housing loan is 224409 billion, the net deposit is -6082. 2019 Xiamen housing deposit is 312.1 billion, housing loan is 504.7 billion, the net deposit is -42.9 billion, which shows that the residents of the two places are mainly borrowing to purchase houses, and the leverage ratio is high.
Third, the house price to income ratio in 100 key cities is generally higher than the international practice
According to international practice, the house price to income ratio between 3-6 times is a reasonable range, but the average value of house price to income ratio of 100 cities in China in 2020 is 13.2. 36.6 in first-tier cities, 14.8 in second-tier cities, and 11.3 in third and fourth-tier cities.
Even in the Top 10 cities with low house price to income ratio in 2020, only Anshan and Zhuzhou are lower than 6, while the other house price to income ratios are generally higher than 6.
Fourth, the disparity of house price to income ratio among domestic cities is large
Among the 100 cities, the top 3 cities with the highest house price to income ratio are more than 30, while the top 3 cities with the lowest house price to income ratio are below 6.5. The large gap in house price to income ratio among domestic cities shows that income is not the only factor that determines house price, and the rise and fall of house price in cities with constant population movement depends on the increase or decrease of population, followed by the local income level.
Five, the 10 most difficult cities to buy a house, the south accounted for 8, the north only 2
The country’s 10 most difficult cities to buy a house, the north only Beijing on the list. Beijing is the country’s political center, economic center, financial decision-making center, science and technology center. Both financial and technological strengths are strong, and its financial local and foreign currency deposits are the first in the country. So talents will gather in Beijing. But Beijing is so strong that it forms an adsorption effect on the surrounding resources. In addition, in recent years, Tianjin has retreated and the northeast has lost, so Beijing has become the only one in the north.
In the cities where it is most difficult to buy a house, it is often not due to a decline in income, but to a rapid rise in housing prices compared to income. The rapid rise in housing prices is related to the “valuation” of the society. A large part of the valuation is to estimate the future potential.
The main reason why it is difficult to buy a house in Tianjin is the slightly lower income of the residents, not because the house price is too high, after all, the average price of Tianjin property market is only about 22,000.
The last 10 years, Shenzhen, Hangzhou and other cities rose mainly thanks to the active private economy.
Sixth, the difficulty of buying a house in the top 10 cities are located in Beijing, Tianjin and Hebei, the Yangtze River Delta, Guangdong, Hong Kong and Macao, Hainan Free Trade Zone, the Strait Economic Zone, etc.. Explain the popularity of these city groups.
To sum up.
1, China’s house price to income ratio is on the high side, so the future needs to constantly suppress the excessive rise in house prices, and it is crucial to improve the income of residents.
- Cities with high house price to income ratios do not mean that they do not have potential, and in some cases, they also indicate the popularity of the cities.
3, in cities where the population continues to move, residents’ income is not the decisive factor in housing prices, but mainly in the increase or decrease of the population, which is an important reason for the divergence of one, two, seven national property market in the last 10 years.
The one, two, seven divide, that is: 20% of the country’s cities rose, 70% went flat, 10% fell. 20% of the cities will rise, they are concentrated in the provincial capitals, planned cities, special economic zones, national central cities, municipalities directly under the Central Government and the counties and cities surrounding the above cities.
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