关于房地产，你不一定需要知道的事儿

Summary

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

00:00

🏠 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。

05:01

📉 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。

10:05

🌐 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。

15:05

🏗️ 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。

20:05

💰 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。

25:06

🏡 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。

Keywords

💡房地产市场

房地产市场是指买卖或租赁房产的市场，它与每个人的生活紧密相关。在视频中，房地产市场被描述为一个特殊且重要的经济组成部分，具有其独特的特性，如房产是必需品、投资品，并且与信用市场深度绑定。

💡多米诺效应

多米诺效应在视频中用来形象地描述房地产市场对整个经济的影响。当房地产市场出现问题时，比如房价下跌，它可能会触发一系列连锁反应，影响到经济的其他部分，如信用市场和银行系统，最终可能导致经济衰退。

💡房价决定因素

视频中提到，房价的高低受多种因素影响，包括人口、经济、利率和政策等。人口增长和收入水平提高通常会导致房价上涨，而利率和政策变化也会对房价产生直接影响。

💡信用扩张

信用扩张是指贷款和信贷的增加，这在视频中被指出是过去几十年发达国家城市房价持续上涨的主要原因之一。信用扩张使得更多的人能够贷款购房，从而推高了房价。

💡信用紧缩

信用紧缩是指贷款和信贷的减少，这在视频中被描述为房地产市场崩溃后的一种可能后果。当房价下跌，银行可能会收紧贷款，导致经济活动减缓，进而引发经济衰退。

💡房地产泡沫

房地产泡沫在视频中被提及，指的是房价远高于其实际价值的情况，通常由过度的信用扩张和投机行为引起。泡沫破裂时，房价会急剧下跌，对经济产生严重影响。

💡财富效应

财富效应是指个人资产价值的变化对消费行为的影响。在视频中，当房价上涨时，人们的消费可能会增加，因为他们感觉自己更富有了。相反，当房价下跌时，人们可能会减少消费，以应对财富缩水。

💡REITs（房地产投资信托）

REITs是一种允许投资者通过购买股份来间接投资房地产市场的金融工具。视频中提到，REITs可以提供稳定的现金流，并且风险相对较低，是投资房地产市场的流行选择之一。

💡房地产ETF

房地产ETF是一种交易所交易基金，它投资于多种REITs，从而分散风险。在视频中，房地产ETF被提及为一种类似于REITs的投资工具，适合那些希望避免特定行业或地区风险的投资者。

💡房地产私募基金

房地产私募基金是针对高净值客户或机构投资者的一种投资方式，通常涉及大额资金和专业的投资管理。视频中提到，如黑石集团（Blackstone）等大型私募基金，会在全球范围内投资房地产项目。

💡在线房地产投资平台

在线房地产投资平台是一种新兴的投资方式，允许投资者在平台上选择房地产项目并拥有其一部分股份。视频中以Ark7为例，展示了如何通过这种平台以较小的投资额参与房地产投资，并获取相应的收益。

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?