Looking back, the residential and property rights attributes of real estate are separated. According to the residential attribute of real estate, real estate definitely belongs to the real economy. From the downstream perspective, the likelihood of not moving to a new home and buying a new set of furniture, appliances, and undergoing major renovations is not high. Without improving housing conditions first, the proportion of people changing furniture, appliances, and doing renovations should be very small. From the upstream perspective, industries such as steel, cement, and machinery are all affected by real estate. Real estate impacts various fields such as steel, cement, machinery, appliances, furniture, building materials, etc., and the impact is significant. According to the property rights attribute of real estate, real estate is also part of the capital market. Capital drives the rapid increase in housing prices. Real estate has accumulated a large amount of wealth for the government (through land sales), which is used to build subways, parks, squares, office buildings, official receptions, lavish spending, and also drives the growth of the real economy.
White-collar workers are stratified, with skills, abilities, backgrounds. White-collar workers who are willing to work hard will strive to earn more income, achieve higher positions, enter the middle layers of the pyramid, and buying a house will definitely not be a problem. However, those who enter the middle layers of the pyramid will not make up the majority. Lower-level white-collar workers, ordinary office employees, lack technical skills, capital, special skills, or connections, and lack strong abilities to seize opportunities. If they are not wealthy, it will be quite difficult for these individuals to buy a house in the future. The proportion of people at the bottom of the pyramid is the largest. The situation in Japan is indeed very different from China, and in addition, even white-collar workers in Tokyo cannot afford to buy houses easily. I know a department head at NEC (equivalent to a director in a Chinese company), also a mid-level executive in a large company, who cannot afford a house in Tokyo and lives in a distant suburb.
Some people say that with an annual salary of 300,000 yuan, they cannot afford a house, and with an annual salary of 700,000 yuan, they still cannot afford a house. The reason is that their expectations are too high. They think that with an annual salary of 700,000 yuan, they are already at the top and must live in a large house in the city center. However, the reality is that large houses in the city center are extremely scarce. There will always be someone better off, and there are limits. When buying a house, it is still important to stay within one’s means. A person with assets of 10 million yuan cannot afford a 20 million yuan jade. A person with 100 million yuan in assets cannot buy the right to live in the Forbidden City.
Regarding buying a house within one’s means, it is necessary to explain it more clearly. Let’s use an example: Suppose a person’s family has a monthly income of 15,000 yuan (the typical income of a white-collar worker in the city), has been working for 6 years, and has 500,000 yuan in savings. They can buy a house worth 1.5 million yuan in an area outside the Fifth Ring Road in Beijing (such as Xi San Qi or Haidian). With a down payment of 500,000 yuan and a loan of 1 million yuan, the monthly payment is just over 7,000 yuan, which is completely affordable. Additionally, due to the opening of a light rail, even if they work in the city center, the commute time will definitely be within 2 hours (which is acceptable for a city like Beijing). However, if this person insists on buying a 100-square-meter residential property within the Fourth Ring Road, priced at 30,000 yuan per square meter for a second-hand property, it would cost 3 million yuan. With a down payment of 30%, which is 900,000 yuan, and a loan of 2.1 million yuan, it would already exceed their income level and income expectations. As a result, this person constantly complains, blames the government, resents speculators and developers, and constantly claims that society is unfair.
After a year, the national team completes its deployment, and the prices in Xi San Qi and Haidian rise to 30,000 yuan per square meter, so buying a 70-square-meter property would cost 2.1 million yuan. With a 30% down payment, it would be over 600,000 yuan, a loan of 1.5 million yuan, and a monthly payment of around 12,000 yuan. At this point, buying a 70-square-meter property in Xi San Qi would already be very challenging.
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