关于房地产,你不一定需要知道的事儿
Summary
TLDR本视频深入探讨了房地产市场的多个关键概念,包括其特性、与经济的多米诺效应、房价决定因素以及价格趋势预测等。强调房地产不仅是必需消费品,也是长期价值保持或增值的投资品。视频中指出,房地产与信贷市场深度绑定,信贷扩张是过去几十年发达国家城市房价持续上涨的主要驱动力。同时,房地产市场的波动对经济有着深远影响,房地产泡沫的破裂通常会导致信贷紧缩,进而引发经济衰退。此外,视频还讨论了影响房价的四个主要因素:人口、经济、利率和政策,并提出了房地产投资的不同方式,包括直接购房、投资房地产投资信托(REITs)、房地产ETFs、私募股权基金以及新兴的在线房地产投资平台。最后,视频提醒观众,尽管理解宏观市场分析很重要,但个人购房决策通常基于个人情况,如定居意愿、资金准备和工作稳定性。
Takeaways
- 🏠 **房地产市场特性**:房地产是必需品,具有投资属性,其价值取决于市场预期的未来价值。
- 📈 **房地产与经济**:房地产市场对经济有显著影响,尤其在信贷扩张时,房价上涨速度可能超过工资增长。
- 💸 **信贷与房地产市场**:房地产市场与信贷紧密相连,贷款购买房产是常态,信贷收缩可能导致经济活动下降。
- 📉 **房地产泡沫破裂的影响**:房地产泡沫破裂通常通过信贷紧缩影响实体经济,比股市泡沫破裂更为严重。
- 🌐 **全球经济危机与房地产**:国际货币基金组织研究显示,历史上多数经济危机与房地产泡沫破裂有关。
- 🏢 **房地产作为投资**:房地产作为投资项目,其价值不取决于实际效用,而是市场预期。
- 👥 **人口因素**:人口增长和人口结构是影响房价的关键因素,移民政策变化也会影响房价。
- 💼 **经济因素**:个人收入水平和就业数据是预测房价的重要经济指标。
- 📊 **供需关系**:房价受供需关系影响,需求主要由人口、经济、利率和政策等因素决定。
- 🏢 **房地产投资方式**:除了直接购房,还可以通过REITs、房地产ETFs、私募基金和在线投资平台等间接方式投资。
- 🏡 **个人购房决策**:个人购房决策通常基于是否在城市定居、储蓄情况和工作稳定性,而不仅仅是宏观经济分析。
Q & A
房地产对经济系统有何特殊性?
-房地产市场在整体经济系统中非常特殊和重要,它不仅是消费品,也是投资品,具有保值或增值的潜力,并且与信贷市场深度绑定,对经济有显著影响。
为什么说房地产市场具有多米诺效应?
-房地产市场与信贷紧密相关,一旦房地产市场崩溃,信贷市场也会受到影响,进而导致经济活动下降,公司资金链断裂,甚至引发经济衰退。
什么决定了房价?
-房价的决定因素包括人口、经济状况、利率和政策等。人口增长和收入水平提高会增加对房屋的需求,从而推高房价。
如何预测房价趋势?
-可以通过分析供需关系来预测房价趋势,主要考虑人口动态、经济状况、利率变化和政府政策等因素。
房地产泡沫破裂为何比股市泡沫破裂更可怕?
-房地产泡沫破裂通常伴随着信贷泡沫的破裂,这会导致银行遭受巨大损失,信贷市场紧缩,进而引发更广泛的经济衰退。
为什么说房地产是一个必需品?
-房地产是一个必需品,因为每个人都需要住房。它不仅是消费商品,也是投资商品,具有长期价值保持或增值的潜力。
在中国和美国,房地产在家庭资产中占比如何?
-在中国,房地产占家庭资产的70%,而在美国,这一比例为28.9%,显示房地产在两国家庭财富中都占有重要地位。
房地产贷款与股票杠杆贷款有何不同?
-房地产贷款是以房屋作为抵押,而股票杠杆贷款则是以购买的股票作为抵押。房地产贷款在房价下跌时银行面临更大风险,因为抵押物价值下降可能导致银行亏损。
财富效应在房地产市场中如何体现?
-在房地产市场中,房价上涨时财富效应不明显,但房价下跌时,财富效应显著,因为人们会感受到自己的财富缩水,从而减少消费。
REITs是如何运作的?
-REITs(房地产投资信托)通过在金融市场筹集资金购买房产,然后将房产出租,投资者通过购买REITs份额获得定期的租金收入,即股息。
个人购房时应该考虑哪些因素?
-个人购房时除了考虑房价,还应该考虑是否在该城市定居、是否有足够的积蓄、工作是否稳定以及是否能够承担贷款等因素。
Outlines
🏠 房地产市场概述
本段落介绍了房地产市场与每个人生活的密切关系,强调了房地产市场的特殊性和重要性。提到了房产市场的一些特性,如房产是必需品和投资品的双重属性、房产市场的多米诺效应、房价的决定因素以及如何预测房价趋势。同时,分析了房产与信用的深度绑定,以及房产泡沫破裂对经济的严重影响,包括信用紧缩和财富效应。
📉 房地产市场与经济危机
这一段落讨论了房地产市场泡沫破裂对经济的影响远超过股市泡沫破裂,引用了国际货币基金组织(IMF)的研究,指出历史上多次经济危机由房地产泡沫破裂引发。通过2008年次贷危机的例子,解释了信用紧缩的可怕之处,以及不同国家在应对银行系统危机时的挑战。此外,还探讨了房地产财富效应的不对称性,即房价下跌时对消费和经济的影响更为显著。
🌐 房地产市场需求分析
本段落深入分析了影响房地产市场需求的因素,首先是人口因素,包括人口结构和流动趋势,其次是经济因素,如人均收入和就业数据。讨论了如何通过历史趋势来预测未来变化,并指出了专业分析中的局限性。同时,还提到了外国投资对某些开放经济体房地产市场的影响。
🏗️ 房地产市场供应分析
这一部分讨论了房地产市场供应的概念,即市场上房屋销售的净增长数量。强调了住房供应的不弹性和长周期,以及如何通过观察房屋开工数据来衡量供应。同时,指出了在人口稀少地区,供应可能成为影响房价的关键因素。
💰 房地产投资方式
本段落介绍了几种房地产投资的方式,包括直接购买房产、房地产投资信托(REITs)、房地产ETFs、私募股权基金以及新兴的在线房地产投资平台。讨论了每种投资方式的特点、风险和潜在回报,以及它们对房价波动的敏感度。
🏡 个人购房决策
最后,本段落指出了个人购房决策通常基于个人的稳定生活需求,如定居、储蓄和工作稳定性,而不是宏观市场分析。强调了拥有自己的家对个人的情感价值,以及在实际购房决策中,人们往往更关注个人情况而非市场数据。
Mindmap
Keywords
💡房地产市场
💡多米诺效应
💡房价决定因素
💡信用扩张
💡信用紧缩
💡房地产泡沫
💡财富效应
💡REITs(房地产投资信托)
💡房地产ETF
💡房地产私募基金
💡在线房地产投资平台
Highlights
房地产市场与每个人的生活密切相关,具有其独特的特性和重要性。
房产不仅是消费品,也是具有长期增值潜力的投资品。
中国家庭资产中有70%是房地产,美国也有28.9%,显示房产在家庭财富中的重要性。
房地产市场与信贷深度绑定,大多数人需要贷款购房,这使得房产成为主要资产和债务来源。
过去50年,发达国家城市房价上涨速度超过工资增长,主要由信贷扩张驱动。
房地产抵押贷款与金融市场其他贷款相比,具有独特的风险特性。
房价下跌时,银行可能面临巨大损失,进而收紧贷款,导致经济活动下降。
房地产泡沫破裂通常会导致信用紧缩,对经济产生严重影响。
房地产和信用泡沫的双重泡沫合并足以摧毁一个国家的经济。
国际货币基金组织研究表明,房地产泡沫破裂是过去50年全球经济危机的主要诱因。
房地产危机实际上是信用危机和银行危机,对经济的影响深远。
房地产投资的财富效应在房价上涨时不明显,但在房价下跌时影响显著。
房地产市场的供需关系决定了房价走势,需求是主要驱动因素。
人口、经济、利率和政策是影响房地产市场需求的四个主要因素。
房地产供应的弹性较小,通常受土地和劳动力限制。
投资房地产的方式包括直接购房、REITs、房地产ETFs、私募股权基金和在线投资平台。
房地产投资平台如Ark7允许投资者选择具体的房地产项目进行小额投资。
个人购房决策通常基于个人生活需求,如定居、储蓄和工作稳定性,而不仅仅是市场分析。
Transcripts
Today, we are going to talk about
a topic that is closely related to everyone's life
which is real estate .
Today Lin
will first talk about the concepts that
can help to understand the whole real estate market
For example,
The characteristic of real estate market, the particularity of real estate market,
Why the real estate market has domino effect on the economy
What decides the housing price, how do we predict the pricing trend, etc
Can you feel the height and depth of the content?
Let’s start
In the overall economy system, real estate market
is very special and very important
Let’s first look at a few characteristic of real estate market
and then we can slowly dive deep into it
First, for a house
the most obvious key point is that
everyone needs it
Don’t underestimate this sentence
In professional economical terminology
unlike stocks, bonds, house is a necessity
It’s not just a consumer item it's also an investment item
An investment item is one that has the potential to hold its value or appreciate in the long run
For example if your girlfriend wanted to buy a Chanel handbag
You’d think that why is this bag so expensive
Your girlfriend can boldly say that
it might be expensive but its value will appreciate in the long run
Buy it all!
This is the main characteristic of investment item
Its value doesn’t depends on
the effect it actually has on you
it depends what you expect it to be worth in the market in the future
Meaning to say how much would people be willing to offer for it
For an investment item
The more the price increases, the more people buy it, the more you buy it, the price goes higher
If you look at it as just a consumer item
the price will be unreasonable
Like some famous wines, artworks, including houses in some places
they are all under the same category
For most of the households, they save up all their money
spend their whole life savings to buy a house.
In China, 70% of household assets are in real estate
It’s 70%
Although it’s lower in the US, but the figure is 28.9%
which is still quite high
Because nearly 1/3 of the nation's household wealth are
concentrated in this market
The key is this ratio
is higher in the less affluent households
That is to say,
Houses connect almost everyone in the economy
and the connection is stronger in less affluent households
So this is very unique
It's totally different from the stock market
The third feature of the housing market
It may be more important in the economy
is that it is deeply bound to credit
When you hear the word credit, it may sound a little strange
To put it bluntly, everyone needs a loan to buy a house
that is to say
Real estate, a much-needed product, is most people's main asset
And a lot of people are going to be in debt for another 20 or 30 years because of this
Why do you think in the last 50 years
house prices in developed cities in developed countries have been rising all the time
rising faster than wages
What is driving it?
It's due to credit expansion
Take a look at these 17 developed countries
the ratio of lending to GDP over the past 100 years
From 15% in 1950 to nearly 70%
Like we mentioned earlier
Real estate through credit loans and banks throughout the system
are now connected
We also know that
For most people, the majority of their assets are in real estate
That is, through real estate and the financial system
most people become connected to each other
Now this system becomes interesting
Because real estate mortgages have a very interesting feature
For comparison
let’s look at some usual loans in financial market
For example, when you trade stocks
You'd find a broker to borrow money for leveraged stocks
This is essentially where you take out a loan and buy stock
The stocks you buy are placed in the brokerage, which is used as collateral
Suppose the stock goes down and your collateral is worthless
The bank broker will call you in minutes to ask for margin
If you can’t pay the margin
They'll sell all of your stock right away
Even though the bank and the brokerage act as a middleman
but it's basically risk-free
That's how most financial products are collateralized
Now let's look at real estate
A loan is secured by mortgaging house
Assuming that house prices continue to rise under normal circumstances
Once you fall behind on your payments
The bank could take the house and sell it
There won’t be any losses, they might even make profit
But once the house price is falling or even plummeting
the bank
assuming you are not able to pay back
the bank can take the house and sell it at a loss
Moreover, the transaction cost of a house is extremely high
It may not fetch the market price
So you can see how this compares to the financial products that we just talked about
What is the problem with it?
The bank acts as a middleman and it bears the risk
If for some reason the housing price started to fall
and if a lot of people don't pay their mortgages or don't want to pay their mortgages
The bank would suffer huge losses
Naturally they'll tighten the loan
The liquidity in the economy will be drained
economic activity will drop significantly
many companies will have their capital chain broken and even go bankrupt
Aggregate demand falls, economy slips into recession
To put it simply, as soon as real estate collapses, credit collapses.
When the credit collapses, the bank collapses
When the bank crashes, game over
We mentioned that the liquidity was drained
it’s similar to the effect of increase interest rate
Why does it cause a decline in economic activity?
If you are interested, you can watch the video when I talked about interest rates.
This terrible chain of event
is actually a very typical credit crunch.
Real estate bubble is generally credit bubble
The initial impetus of that terrible chain
is usually the burst of the real estate bubble,
and then through credit crunch
it expanded to the real economy
So you see, real estate bubbles and credit bubbles
This double-bubble merger
is enough to destroy a country's economy.
That 's why the bursting of the real estate bubble is
far more terrifying than the bursting of the stock market bubble.
IMF research shows that
during the subprime mortgage crisis in 2008
Among the 23 countries that were having double-bubble
21 of them fell into a severe recession
Among the past 50 global economic crises
more than 2/3 were triggered by the bursting of the real estate bubble
The most widespread crisis we've heard about
like Japan economic crisis in the 90s
The European debt crisis after 2010
are all due to real estate market
The 2008 subprime mortgage crisis in the United States
is a very typical example of credit crunch chain.
What exactly is going on with this?
We can talk about this later
Why is a credit crunch so scary?
This is because after credit crunch
if you want to save the whole banking system
it's a very difficult and expensive matter
US and Japan can print their own money to bail out the banks
but it would be a problem in the EU
because when it comes to printing money
it is not decided by only one country in EU
We talked about it before in European debt crisis episode
Like Ireland or Spain
When the EU was first established,
everyone rushed to these
places where housing prices were relatively cheap
The government, in the face of the sudden prosperity,
in Congress at the time
a lot of people probably have 5 or 10
or even 20 of their own houses
They turned a blind eye on policy
The financial system has also been fully deregulated
The whole country's real economy began to tilt towards real estate
there you have it, a credit bubble
As a result, as soon as the European debt crisis broke out
bubble burst
A large number of bad debts appeared in the entire banking system
it was at the risk of collapsing
Spanish government was blinded by this
They couldn’t print money
because it’s the ECB job’s to print euro
At the same time, the EU does not allow everyone to issue debt at will
In the end Spain had no choice
but to borrow from EU 100 billion to save its own bank
and owe a huge debt
so much so that Spain's real economy has yet to get back on its feet
This year, again, with central banks began to raise interest rates amid high global inflation
the road ahead is going to be even more difficult
Italy, Ireland
are facing similar situation
You see we came up with so many examples
It actually comes down to the real estate crisis
In fact, most of the time
it's credit crisis and banking crisis
Okay, just now we deduced layer by layer that it's the effect of the credit crisis.
In fact, there is another interesting feature of the real estate market.
Didn't we just say that a house has the attributes of an investment product?
If we look at the whole economy
the fluctuations in the price of these investment items
in theory, it will not affect the real economy
For example, in the stock market
One person buys and one person sells
That's money going from one person's pocket to another
And then the equity exchange is just a simple exchange of hands
So whether the stock price goes up or down
in terms of output and the amount of money in the entire economy
it should have no effect
In actuality when you see a stock price goes up
the consumption will increase
Why do you think is that?
It's because of the wealth effect
What is wealth effect
For example
Let's say for a person who owns a stock
if the stock goes up by 5% today
You haven't sold your stock yet, you haven't cashed out
your spirits will be different.
you go out have a big meal or buy a handbag
because you know your wealth increases
consumption will also increase
This increase in consumption
is a real increase
there's nothing to cancel it out
Conversely, when you know your wealth has diminished
consumption will also decrease
It may sound innocuous
But in fact, it is this small psychological factor that
will have a profound impact on the entire economy.
It's a very important cause of recession
In the real estate market
its wealth effect is very unique
Why do I say it’s very interesting
because when housing prices increase
the wealth effect is not very obvious
but it’s very obvious when the price fall
Why is it so asymmetrical?
This is a little bit psychological
Let's just dip into it a little
Probably the most important reason is because it is a necessity
Because most people own only one house
Even if you know the house will be worth more next year than this year
most people won't sell the house to cash out
That's about as good as it gets
It's very limited in terms of how much it can increase your consumption
But there are still a lot of people who haven't bought a house
Those who are going to buy a house in the future see housing prices rising year after year
you can only eat instant noodles every day to save money
otherwise, you may not even be able to get married
Consumption declines
So these two groups of people cancel each other out
the wealth effect of increased consumption brought about by rising house prices
the wealth effect of increased consumption brought about by rising house prices
it may even be negative
But when housing prices fall
this effect is very obvious,
because everyone sees that the house they bought for 5 million last last year
is worth 3 million this year.
You still owe four million in loan
Don’t think about buying a bike
just eat instant noodles to save more money to pay loan
otherwise your lover might run away with someone else
consumption decline
This is just a little humour
I don't mean to belittle
In the US during the dot-com bubble burst in 2000
$6.2 trillion was wiped off its market value
but US retail sales data for the next two years
was barely affected
It still keeps growing by a few percents every year.
This retail sales data is to some extent
reflect the total demand of the market
but after 2008 subprime mortgage crisis
The stock market has also lost $6 or $7 trillion
But this time it's different
The housing market has lost $3 trillion in value
Retail sales plummet this time
There has been a continuous negative growth of more than 10%
This was the largest drop in U.S. history at the time
Only in 2020, at the beginning of the pandemic
there was brief more severe decline
When house prices fell and collapsed
This negative wealth effect in the housing market
becomes a very important factor in the recession
This is why the real estate market
plays a pivotal role in the macroeconomic
First, real estate market is a necessity that connects consumers
At the same time it is a huge credit market
The burst of real estate bubble causes credit crunch and wealth effect
would bring a huge blow to a country's economy
While I was writing the draft for this episode
I found an interesting point
We’ve talked a lot earlier about
how important is the real estate market and how does it affect the economy
But mainstream economy academia
doesn't seems to care about real estate.
When I was an undergraduate, whether it was macroeconomics
or microeconomics
We were using the Mankiw textbook
Several such thick textbooks
not one mention much about real estate
I guess he published the books too early
If it was after the 2008 financial crisis
If it was after the 2008 financial crisis
then real estate will probably account for a large portion
Just now we talked about
about some things related to the real estate macro-economy industry
It might have nothing to do with you
多But I'm so excited that I talk a little bit too much
Next, let's take a look at the issues that everyone is very concerned about
Housing price
Will the house price go up or down
Should I buy it or not
In fact, the theory of predicting the price is very basic
It's the analysis of supply and demand
higher supply, lower price
higher demand, higher price
I'll first declare the framework I'm going to talk about next
comes from Lin alone
Real estate analysis does not have
a particularly systematic theory in academia.
So you can listen to it first
of this little framework
First, let’s look at demand
Although the supply and demand of housing prices are jointly determined
but the main driver here is demand
What do I mean by demand?
It's about how much people are willing to buy a house
and how much they are willing to spend to buy a house
There are four main points
These points may sound obvious to you
But if you sum it up and connect it
with the support of some data
you can get a rough idea of what the demand is in the real estate market
The first and most important factor is definitely population
You pull the time dimension down to, say, ten years
Population should definitely be the number one factor when considering housing prices
We mentioned that house is a necessity
An increase in population will inevitably lead to an increase in demand
Generally, within a country its population is relatively in a closed loop
You can look at the demographic structure
to deduce what will happen in the next 20 to 30 years.
The number of people who are capable to purchase property
If the demographic structure of a country
is a pyramid shape
There are a lot of young people
then it is a robust structure
House prices can't go down in 20 years
So in turn, let's say if this demographic is in bucket shape
or inverted triangle, where there are fewer and fewer young people
The price will be under considerable pressure
For example, if you look at some of the
countries with most aging population in the world right now
Like Japan, Italy, Greece
In the past two decades, housing prices have been very sluggish
You can't just look at demographics
to analyze housing prices in a city
you have to look at the movement of population
Like Detroit for example
It was America's rising auto city after World War II
With the U.S. auto industry in decline
the population also began to slump
Its population has fallen from a peak of nearly 2 million
to less than 700k
Let's look at housing prices
The median house price in Detroit as of 2022
is $102,000
Note that this is not per square meter, it is an entire unit
a big villa for $102,000
The state in which Detroit is located, Michigan
the median is about $200,000
In the US as a whole, the median is about $400,000
Detroit as a big city
the price of the house is a little
Same with countries
How did Canada and Australia's housing prices rise so sharply
Population
You can see the demographic data of these two countries
I know you might think I drew it casually
Do you think it’s because people from these countries are reproducing a lot
Of course not. It's immigration
In fact, population growth in both countries
Immigrants accounted for more than 60% of the total
And these new immigrants also have the ability to buy houses
So the price keeps going up
Once you hear about the immigration policies of these two countries
what has changed
Or some factors influence the trend of immigration
the housing price will surely adjust in the long run
We talked a lot about
how population affects house prices
So how do professionals generally predict this population trend?
It's actually quite simple
So if you look at the past period of time
the trend of population inflow or outflow
then roughly predict in the near future
it will maintain this trend
Specifically, for example, you can look at
The population over time, the employed population
High-income population and so on
It's that simple
The second is the economy
For a city, a country
if everyone is getting wealthier
the house price as a whole is going to be higher
Although Greece and Turkey are in Europe
their house price is only 1/10 of Germany and France
No one’s buying even though it’s cheap
Economy
To measure the economy of a country or region
most would say just look at the GDP
but GDP measures the economy as a whole
a big part of it is corporate revenue
So if we're going to measure the economy that's more relevant to the individual
usually you can look at per capita income or employment data
After all, it's people who buy houses
This is more closely related to the trend of house prices.
So how can you predict future changes in per capita income?
That's right, just look at the historical trend as before.
Many investors will look at the income trend of the median group
or data like employment, unemployment rate
It's the same principle
After listening to these two professional prediction methods
don’t you feel like cursing it
Isn't that just connecting the past trend and then connecting the dotted line upward?
Even professional analysis really
doesn't have much room for that kind of quantification
Professional organisations may use more segmented metrics
But that's the general rule
The rest is case-by-case analysis
Of course when you look at these metrics
You have to know a little bit about what's behind it, right
For example, what brings the revenue growth
If your analysis shows it’s sustainable
let’s say it’s driven by an industry
like in Silicon Valley, Shenzhen
or it’s company-driven
like in Seattle, then there’ll be momentum
But if it’s Midland, a city in US
Midland
A small city in Texas with a population of roughly 100k
If you rank it by its employment numbers
You'll find that this city often tops the employment list in the United States
Does that mean the city is developing at a rapid pace
So we should have gone in and invested in real estate
NO. Why does the employment rate there grow so fast?
It’s because oil is often found around it
Once the oil is found, a mining team comes in
So here comes the employment rate data
But they left as soon as they finished mining
After a while, oil is being discovered again, and the data comes up again.
That's why the employment numbers are often at the top of the list
But it is also often at the bottom, it’s very volatile
If you want to invest in real estate in this city
that's clearly not a smart move.
So that's why
we have to understand the logic behind this data
Actually in terms of the economy
it is more common to measure by income.
But there is a force
that is very important for cities and countries that are more open
that is foreign investment
It can also be applied to the broader economy
Look at some of the world's largest cities
housing prices in Hong Kong, New York, Los Angeles
and many resort cities
global hot money is one of the main forces
When we were talking about population
Japan, Greece, Italy with aging population
their house prices are underperforming
But in Portugal
the housing prices have almost doubled since 2013
Look at this place
the population is not growing, the economy is not growing much as well
How are the house prices soaring?
This is thanks to international speculators
Portugal has good climate with beautiful scenery
housing is also extremely cheap
So it attracts a lot of foreign investors from
EU, US, and Asia
they buy big villa here for vacation
which drives the house price up
Therefore, hot money is actually a very powerful force.
For those places where the financial market is particularly open,
it is worth paying attention to
Two other main factors affecting demand
One is interest rate and the other is policy
A high interest rate makes your loan more expensive
that would definitely reduce demand
At the same time lower interest rates will increase demand
The effect of interest rates on loans
Many people may not realise it
It's kind of like the algorithm for the duration of bonds
Let's say you take out a $1 million loan for 25 years
if the lending rate goes down by 1%
your house is about $100,000 cheaper.
That’s saying 1% cut is equal to 10% discount on your house price
if it’s 2% cut then it’s 20% off your house price
Can you say it’s not important
Of course, this 10% discount we're saying here
is a very, very rough estimation
It has to be calculated more precisely
This is related to the interest rate and term of your loan
Okay, the last factor is policy
Including some home purchase discounts, home purchase restrictions, taxes, etc.
For example, there are some cities in China now
have some restrictions on the purchase of second homes
or the tightening of lending policies
These are all relevant policies to reduce demand
Let's look at a very typical example
Do you know which cities and regions
have the highest house prices in the world?
Not Beijing, Shanghai, Guangzhou, Shenzhen, or New York, Los Angeles
Nor Hong Kong, Singapore
It’s Monaco
A small country carved out from the south of France
The entire land area is only two square kilometres
Usually a university campus is bigger
the south of France. The average university
is $50,000 per square meter
The population density is really high
It's packed with celebrities, billionaires, luxury cars and yachts
If Beijing had the same population density
the population of Beijing will be 330 million
Why do you think the rich are so eager to go there
It’s because of the policy
There is no income tax in Monaco
Make money without paying taxes and the country has a nice climate
still at the heart of Europe, not an island in the middle of nowhere
So it’s naturally favoured by the rich
So you see, the four factors we just talked about
Population, economy, interest rate, policy
The first two are market driven
The latter two are policy driven
Policy driven factors generally have an immediate effect in the short term
while market driven factors are more fundamental
and play decisive role in the long run
Taking these four points into consideration
you can basically get a
rough framework for the analysis of real estate market demand.
if there is such an ideal place where
the population is rising steadily and people's income is also rising steadily
and then the interest rate is still in a cycle of rate cuts
with no bad policies
So this is the kind of place where housing prices
will keep going up if nothing happens
This is also a very popular area for many
professional real estate investment institutions.
But there is one thing you need to pay attention to
is that the real estate bubble, the credit bubble which we just talked about.
actually meet all the four conditions
This is because credit bubble
is generally a phenomenon created under
low interest rate environment which overheat the economy
Plus we just said those professional real estate investors
Their analysis is also based on these four points
which in turn blows the bubble bigger
So please don't blindly follow these indicators.
Okay, demand is done, let's take a look at the supply side
What does supply mean?
It's actually a net increase in the number of houses sold on the market
We usually pay more attention to
area where the population is growing and economy is more developed
The supply of houses doesn't fluctuate much because land is limited
and the elasticity of housing supply is relatively small
due to labour constraint
So it's hard to see a time when demand surges
everyone rushes in to build houses
Generally, to measure housing supply
a data that everyone will look at is called Housing Starts
Housing Starts
is the statistics on the license has been applied for
to build new residential building
This is US Housing Starts data
this is US housing price
In theory, as supply increases, house prices should fall
Well, look at these two graphs
Even if they are related, it is positively related
That's not to say supply doesn't matter
It’s because
Firstly, it has a relatively long cycle
Secondly, it’s inelastic
So the influence is generally not as strong as the demand side
But if you're going to a place that's sparsely populated
that's another story.
For example, I read a real estate report from the Finnish government
They analysed the country's real estate market
It is found that the most important factor in determining
the housing price in their country is the housing supply.
So it depends on the place
Let's briefly talk about
some of the more common ways to invest in real estate
If you are buying to live in then there’s nothing much to say
but if you want to invest in real estate
there are several ways to do it
First of all, you can definitely buy a house yourself
then rent it out or renovate it and resell it
All these can be done
But the problem with this way is
First you have to spend a lot of energy looking for a house
Secondly, all your risks are concentrated on this house
Furthermore, the liquidity of the real estate market
is relatively low
This house may be difficult to sell when you need the money urgently
and even if you manage to sell it, you’d probably got ripped off
Moreover, the cost for each buying and selling transaction is quite high
Normally the cost of a single real estate transaction
for both parties could add up to
about 15% - 20%
However, there are advantages to buying your own house
Information in the real estate market
is often opaque and asymmetric
so prices in the market are uneven
If you're willing to take the time to look carefully
coupled with skilful negotiation
it is possible to find below-market housing
To sum it up, first, it takes a lot of time and energy
Second, it requires a certain degree of professionalism
Most of us probably don't have time for that
Therefore, under normal circumstances
will choose the following indirect investment methods
First of all, REITs
Real Estate Investment Trust
REITs
are generally divided into two types.
One is called equity and the other is called mortgage.
These two are completely different
We commonly hear more of equity type, Equity REITs
Professional investors will first raise funds in the financial market
then they’ll buy a property
This property may be residential or commercial
maybe a hotel, etc. and then rent it out
In this way, you will get a relatively stable cash flow every month
that is rent
and then it's paid out as a coupon to the investors
We as investors will buy REITs
in the market just like you buy funds
Then you'll have a steady cash flow every month
The pros and cons
are basically opposite of buying house on your own
But there's a caveat
REITs has one very big characteristic
It's more like a bond because it requires the cash flow and coupon
because the houses are bought
mainly for rent not for sale
Therefore the impact of house prices on REITs
are relatively smaller
rental market is more affected by it
Another form of REITs is the mortgage type
It means that after the money is collected, it is not used to buy a house but is used for giving out loan
Similar to equity REITs
you as an investor receive monthly payments on a regular basis
This is more like a bond
It is more clearly linked to interest rates and credit
and has little to do with housing prices
To sum it up, REITs
is a popular choice if you want
to invest in real estate market
It's a $1.3 trillion market in the United States
But if you expect house prices to go up in the future
and wanted to take profit by investing in this
the REITs might not be a good option
The second is real estate ETFs
Real Estate ETF
This is actually very similar to REITs
Because this kind of ETF
is generally invested in various REITs.
Although REITs have largely reduced the risk
but in most cases
REITs invest in an industry or a region
So if you want to avoid risks in industries and regions
then you can choose Real Estate's ETF
Then there is the more popular for high net worth clients
Real Estate Private Equity Fund
The biggest names here is Blackstone
A new multi-billion dollar fund will be created
to invest in real estate around the world
The amount involves is large and very professional
After raising the money, they can go all over the world
to buy properties, buy land, decorate and market it
or sell it out
then finally distribute the returns to investors
But this is only open to high net worth clients
or institutional investors
There is also a new model that has emerged in recent years
It's a real estate investment platform
Right here on this platform
You can choose a real estate investment project
and then own a part of the real estate, a share of it
It's similar to REITs
The share that you bough are entitled to the benefits of the real estate project
If you think of REITs as if you put your money in a fund
then the fund manager chooses the real estate project
This platform allows you to choose the project yourself
Kind of like buying stocks
There is a platform, Ark7
On this platform
You can see these real estate investment projects
For example, a two-unit student apartment in Philadelphia
cost $967,000
You definitely wouldn’t want to spend as much, no problem
Ark7 has divided it into 10,000 shares
You only need to spend $96.70
to own 1/10,000th of the property in this house
You can buy as many shares as you want
You can see the monthly rent of this house here
$6500/month
That's an expected return of 6.06% on annualized rent
You can also see the history of occupancy rates
Historical housing price trend information and so on
It has appreciated by 15% annualized over the last 10 years
In other words, the total revenue will reach 21.06%
And you know what
All of this house rental management is done by the Ark7 team
Moreover
all the listings and operational data
are transparent
The Ark7 platform is now available to the general public
If you want to know more about the listings
Check out the link in the description
Limited time benefits for new users
In Arizona, if you buy 10 shares, get one free
can get up to $320 worth of stock holding bonuses
Thanks to Ark7 for supporting this video
Lin doesn't make any investment advice
nor endorse the platform nor bear any legal responsibility
OK, this is a general framework for the
analysis of the entire real estate market
But to be honest
for most of us
It’s one thing to understand the macro and to analyse real estate market
but when it comes down to our individual decision to buy a house
it’s actually pretty clear to us
Basically when you’ve decided to settle down in this city
you have saved up enough money, your job is stable
then you’ll take out loan to buy house right
After all, it's my own, it feels like my home
So you won’t be look at the average salary, the demographics,
This is what life is all about, right?
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