China Property

Price to Rent ratio compares median sales price to median annual rents for similar properties. Here (read off a chart so approximate, then annualized) are price to rent ratios for major cities in China:

  1. Shenzhen: 58
  2. Shanghai: 53
  3. Beijing: 51
  4. Guangzhou: 48

Here, from Yahoo Finance, SmartAsset reports Price to Rent ratios for the top 50 cities in the US.

  1. San Jose: 42
  2. San Francisco: 37
  3. Long Beach : 33
  4. Seattle: 33

While in San Jose it takes 42 years of rent to buy the property, which is expensive enough, in Shenzhen it takes 58 years. Comparing the top four cities, China is around 45% higher – or more speculative. And you thought that we had a real estate bubble.   At the other (cheapest to buy) end, in the US, you can buy the property for as little as 6 years rent:

  1. Detroit: 6
  2. Cleveland: 8
  3. Baltimore: 12
  4. Milwaukee: 14

And of course this ratio uses gross rent and, unlike the “cap rate” often used to evaluate rental properties, does not take into account the expenses of operating a rental property, such as taxes, maintenance, security, insurance, etc.

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