High housing prices in Shanghai
The topic of my presentation is making analysis into three parts—current situation, cause and solution.
The first part—current situation. Now, many experts still believe that housing prices continue to rise; just because of limited land. The range of rise in housing price exceeds the range of rise in resident income. It makes lots of low and middle-income people worried about their own houses. Housing revenue rate is increasing, so real estate plays an important role in the economy of Shanghai.
The first cause is--The economy of Shanghai continuously rise and it makes real estate market prosperity and development. From this chart, we can find a trend—GDP in Shanghai increased every year. People have more and more money to invest. In addition, Chinese have a traditional view that buying houses is the best way to keeping value.
The second point is huge profits. Along with the change of industrial structure, many people find real estate industry has huge profits in China. In China, its average profit rate is 69% and gross margin is as high as 55%. Huge profits attracted more businessmen and speculators.
The third point is--Banks have launched mortgage. Mortgage has brought a great hope to someone who can’t afford to buy a house. This table shows housing loans occupy very large proportion of personal consumption. And in 2004, the upward trend appeared, at the same time, Shanghai housing loans reached 244 billion Yuan.
The forth point is--Population movements. It is a common sense that Shanghai is an international city, citizens come from different places. The picture below tells us a mode of population movements. Demands are more than supplies which means population is becoming bigger and land is becoming limited. That’s why Shanghai housing prices will continue to rise.
Next, The first solution is Low-rent Houses. The government should increase investment to support poor people. The low-rent housing can meet...
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