| I guess the best measurement on how soon the bubble will burst is to look at affordability in general. If we compare with the situation now in Hongkong (where the property bubble is believed to have been "bursted" already), we may draw some interesting conclusion.
A fresh college graduate in Hongkong earns an average of RMB 10,000 a month and a typical apartment in Hongkong (perhaps 70 sq meters - much smaller than in Shanghai as people there are used to smaller space !) costs around RMB 2.5 million and thus it is 250 times monthly salary ! If we look at Shanghai, the price for a 90 sq meters apartment is say around RMB 600,000 and if we assume the salary for a fresh graduate to be around RMB 4,000 per month, it is only around 150 times. It is clear that we are far from a bubble burst. If we take the Hongkong examplpe, price can go up at least another 100% ! |
Houses in Shanghai