Disaster for Britain as housing becomes more affordable

Really2

beingjdc wrote: »

Oh for pity's sake. What was actually pointed out was that a 1000 square foot property in the financial capital was the equivalent of £16 million in national average wages.

I imagine most people buying a 1000 square foot property there are rich businessmen, comparing it to the average wage of a country that still has hundreds of millions of agricultural labourers is silly.

What's the average house price in Mayfair compared to the average wage in Lincolnshire? There's a 2-bed flat currently for sale in Mayfair for £5.25m, so...

It was not compared against the countrys average wage it was the average wage for that city.

So it was 600X the cost of the average wage in that city.

StevieJ

beingjdc wrote: »

Oh for pity's sake. What was actually pointed out was that a 1000 square foot property in the financial capital was the equivalent of £16 million in national average wages.

I imagine most people buying a 1000 square foot property there are rich businessmen, comparing it to the average wage of a country that still has hundreds of millions of agricultural labourers is silly.

What's the average house price in Mayfair compared to the average wage in Lincolnshire? There's a 2-bed flat currently for sale in Mayfair for £5.25m, so...

OK, so house prices are only 3 times more expensive in China

beingjdc

Really2 wrote: »

It was not compared against the countrys average wage it was the average wage for that city.

So it was 600X the cost of the average wage in that city.

The average wage in Shanghai is about $5000. So if the average 1000 square foot flat costs $100,000 it's 20 times earnings, not 600.

Really2

beingjdc wrote: »

The average wage in Shanghai is about $5000. So if the average 1000 square foot flat costs $100,000 it's 20 times earnings, not 600.

Just quoting the article.
http://research.stlouisfed.org/publications/es/08/ES0819.pdf
"In Beijing and Shanghai, for example, the
median price of a 1,000-square-foot apartment is about
$100,000 at current exchange rates. If the average annual
income per capita in Beijing and Shanghai is about $2,000then the average Chinese worker needs to save his or herentire annual income (a 100 percent saving rate) for about50 years to buy an apartment. Even if a borrower can obtaina mortgage, the 30 percent down payment means a one-timepayment of $30,000—equivalent to about 15 years’ income(ignoring interest payments). Such high real estate costs have boosted the savings rate."
Minimum wage works out about $140 per month :eek: so I very much doubt $5000 is the average.
http://www.forbes.com/feeds/afx/2008/03/25/afx4814132.html

Even if it was £5000 is 20X salery ok?
It states that is why saving is preverlent in china because the cost of the property. Why do you have a problem accepting that (I am not saying it is fair but I did not write the article either)

PS sorry I miss calculated I did the $2000 as a monthly wage not yearly so it is 50X average wage

beingjdc

Really2 wrote: »

Just quoting the article.

If the average annual income per capita in Beijing and Shanghai is about $2,000then the average Chinese worker needs to save his or herentire annual income (

Well, average income per capita and wage aren't the same thing are they? What's average income per capita in the UK? Average wage is £25,000, 29 million people have jobs, total income therefore at most (assuming everyone works full-time) £725 billion. Total population 61 million, so average income per capita just under £12,000.

The Shanghai Municipal Labor & Social Security Bureau recently released a guide on the prospective wages of Shanghai graduates in 2008. The guide revealed that wages for graduates, from every level of educational background, have risen to some extent.

According to the data, the monthly wage for graduates is on average 2,492 yuan. More specifically, the wage for those with a doctorate is 6,000 yuan; with a master's receive 4,650 yuan; with a bachelor's 2,567 Yuan; junior college graduates receive 1,996 yuan (including Higher Vocational college graduates); Secondary Vocational graduates (including graduates from secondary schools, technical schools and vocational schools) receive 1,707 yuan.

A Yuan is about 13 cents, so if a graduate is earning $4300 and a PhD graduate earning over $10,000 I don't think it's out of the question that the average wage is around the $5000 mark.

I'm not denying that Chinese property got insanely overvalued (and is also falling), but the high level of savings long predates the property bubble, so that can't be the explanation. Might be the lack of pensions, historically.

Really2

beingjdc wrote: »

I'm not denying that Chinese property got insanely overvalued (and is also falling), but the high level of savings long predates the property bubble, so that can't be the explanation. Might be the lack of pensions, historically.

I agree it is more likely it was initialy for saving for their future.(now I should imagine it is for their childs future.)
I suppose china is a good example of what overcrowding can do to property prices.

PasturesNew

I'd like to state that I didn't read this thread at all. I tried, I started to ... but it all became a bit argumentative ... and ... dull.

So there.

PasturesNew

beingjdc wrote: »

Average wage is £25,000,
29 million people have jobs,
total income therefore at most (assuming everyone works full-time) £725 billion. Total population 61 million,
so average income per capita just under £12,000.

But pensioners have incomes without a job.
People on benefits have incomes without a job.

There's a lot of money sloshing about that's not gained from a job.

treliac

PasturesNew wrote: »

I'd like to state that I didn't read this thread at all. I tried, I started to ... but it all became a bit argumentative ... and ... dull.

So there.

Think it's just above our heads Pastures.

Really2

PasturesNew wrote: »

I'd like to state that I didn't read this thread at all. I tried, I started to ... but it all became a bit argumentative ... and ... dull.

So there.

I Agree the debate was good untill a certain person begining with "Woo" came in and starrted personaly attacking me.

I should not have bitten but I can only thenk the personal attack was down to the point about China.