Posted by (American Life GuideEditor's note) In the past XNUMX years or so, the relationship between the average annual growth rate of US housing prices and the inflation rate accurately predicts US housing prices. Whether investors' return rates are high enough and whether they can achieve the purpose of diversifying investment can be used as a reference. .
China leads overseas real estate investment
In 2013, in addition to record highs in first-tier cities, it was also an unprecedented "sealing year" for Chinese overseas buyers.
綠地集團以50億美元購得美國紐約布魯克林的大西洋廣場項目。復星國際以總價格7.25億美元購得紐約的第一大通曼哈頓廣場。SOHO與巴西財團聯手以7億美元購買了美國紐約通用大樓40％的股權。中國平安以24億元買下了英國倫敦地標性建築勞合社大樓；萬科亦表示將進軍曼哈頓的摩天大樓……中國企業在歐美大都市購房狂潮的背後，是中國高凈值人群的移民潮。
According to research conducted by Hurun, a Chinese wealth research organization, 64% of Chinese millionaires have immigrated or are preparing to immigrate with their wealth, and 1/3 of Chinese super-rich (billionaires) have immigrated.If it is assumed that this high-net-worth group invests 5% of investable properties in overseas real estate, it will generate a demand of trillions of yuan, not including other supporting services.
This demand, coupled with the expectation of RMB appreciation, and the restrictions and risks of domestic real estate, constitute the main reason for overseas expansion.
Japan's overseas expansion history
Those familiar with history will involuntarily think of Japan in the late 20s.
At that time, Japan was experiencing a long-term bull market in the real estate and stock markets.Many large companies have established wealth management departments to manage real estate and stock investment, and their profits even exceed their main business.The land price of Tokyo, Japan is said to be able to buy the entire United States.
Japanese companies and wealthy people, after experiencing the bull market in the housing market and the appreciation of the yen, have set their sights on overseas, and one of the main targets of investment is real estate in the United States.
The landmark event was that in 1989 Mitsubishi Properties purchased a landmark building in Manhattan, New York-Rockefeller Center for US$13 billion.Coincidentally, today, more than 7 years later, according to the Hurun report, China’s first goal of buying overseas houses is still in the United States, and Manhattan’s landmark buildings are frequently taken by the Chinese.The Chinese have become the largest overseas home-buying group in the United States after Canadians.
As an investor, several issues of concern are:Are house prices expensive in the United States now? What are the main laws of the U.S. housing market? What is the high rate of return for buying a house in the United States now?
U.S. house price growth equals inflation rate
根據美國最權威的凱西·席勒(2013年諾貝爾經濟學獎獲得者)房價指數，從1890年到2013年的123年中，有28年是下跌的(佔23％)，95年是上漲的(佔77％)。其中跌得最深的是2008 年，即金融危機最糟糕的一年，跌幅達18％。連續下跌達到5年的只有兩次，第一次是1929～1933年的大蕭條時代，累積跌幅達26％；第二次是2006～2011年由房地產泡沫破滅引發的金融危機，累計跌幅達33％。
Figure 123: The history of housing prices in the U.S. after deducting inflation in XNUMX years
Source: US Bureau of Labor Statistics, University of Wisconsin
So how fast do U.S. housing prices rise in a normal year?
In the past 123 years, the average endogenous (geometric) growth rate of US housing prices was 3.07%.Where does the logic of this number come from? In the same 123 years, the U.S. CPI inflation rate was 2.82% (Figure 0.25), and U.S. housing prices rose at a rate higher than the inflation rate of XNUMX% for more than a hundred years.The general common sense is that real estate is anti-inflation. This is true. After deducting the inflation rate, housing prices will basically not rise.
美國在過去123年中發生過3次十年累計漲幅超過100％的階段，分別是1938～1954年、1969～1986年和1995～2007年。1938～1954年間的地產大牛市是因為1943～1947年因二戰帶來 的工業和消費需求，這5年的年均漲幅為17％，扣除通脹後的平均漲幅仍然有10％，其餘年份的平均漲幅只有2％，扣除通脹後是負增長。
The big bull market between 1969 and 1986 occurred mainly from 1974 to 1979, with an average annual growth rate of 11%, but after deducting inflation, the annual growth rate was only 2%. The average growth rate for the remaining years was 5%, and after deducting the inflation rate, it was negative. The big bull market from 1995 to 2007 occurred mainly from 1999 to 2005, with an average annual growth rate of 11%, and after deducting inflation, it was still 8%.This increase that surpassed inflation was later proved to be a bubble. Housing prices began to fall in 2006, triggering a subprime mortgage crisis. By 2011, after deducting inflation, housing prices in the United States were already lower than they were in 1895 more than a century ago.
There have been three real estate bull markets in the United States over the past 70 years.The bull market in the 20s was entirely driven by contemporary inflation. The bull market in the late 90s and before the financial crisis showed the formation of a bubble, that is, a fake bull market.The growth that was really driven by demand and exceeded inflation was only from 1943 to 1947.In the long run, the increase in U.S. housing prices is basically the U.S. inflation rate.
How fast will U.S. house prices rise?
Figure 3.07 shows two laws of the US housing market.First, the long-term growth rate of US housing prices is XNUMX%, which is slightly higher than the US inflation rate.Second, if the price changes deviate from this axis, whether too high or too low, the subsequent trend can be predicted, that is, it will return to this axis.
This axis also tells us that as of 2013, US housing prices have returned to or even slightly higher than the historical average price after deducting inflation after experiencing a decline from 2006 to 2011 and an increase from 2012 to 2013.This shows that the US housing prices will not rise higher than the historical average (3%) in the future.Other factors that can be considered include the rising financing costs brought about by the United States' withdrawal from quantitative easing, and the recovery of the US economy.These two factors have opposite effects on housing prices.
In addition to looking at inflation-adjusted housing prices, another widely recognized important indicator for measuring the price of housing prices and predicting housing prices is the ratio of rent to housing prices.The logic is that rent represents real demand (not investment value), and housing prices relative to this demand can measure the price of housing prices.
如圖二所示，1960年第一季度到2013年第一季度間，美國平均房租對房價比率為4．98％。21世紀初的房地產泡沫，表現在房租對房價比率從1999年初的4．8％下降到2006年第一季度的2．98％，下降比率達38％。
Figure II
Data source: US Bureau of Labor Statistics, University of Wisconsin
If the ratio of rent to house price is much lower than the historical average, like a stock with a high price-earnings ratio, either the rent is too low relative to the house price, and the rent will rise quickly; or the house price is too high relative to the rent. House prices will fall, or rent will rise, but house prices will not rise.
So is the rent-to-house price ratio back to the historical average through rising rents or falling house prices? In 2007, three American economists (Davisa, Lehnertb, Maninb) published an article on the overall rent-to-house price ratio in the United States .The article is now shocking to read, and it reads like this:
"According to data from the United States since 1960, we constructed a time series of the ratio of rent to house prices and found that the ratio of rent to house prices in the United States was between 1960% and 1995% from 5 to 5, but it was soon after 5. Decline. By the end of 1995, the rent-to-house price ratio had reached a historical low of 2006%. If the rent-to-house price ratio is to return to the historical average in the next five years, house prices may drop a lot."
In the later story, as shown in Figure 2008, the ratio of rent to house price has risen sharply, approaching the historical average.This adjustment was accomplished through the fall in housing prices, including the largest single-year decline in the United States in the past 100 years that occurred in XNUMX.
The history of housing prices in the four major cities
Will the first-tier cities in the United States follow different housing prices? Let’s review the housing price history of some major cities in the United States since the late 80s.
Figure 80 shows the actual housing prices of four first-tier cities in the United States: New York, Boston, Los Angeles, and San Francisco from the late 2013s to XNUMX, after deducting inflation.
Figure 3.1 Real housing prices in New York
Figure 3.2 Boston real house prices and inflation rate
Figure 3.3 Real house prices and inflation rates in Los Angeles
3.4 San Francisco Real House Prices and Inflation Rate
If New York housing prices were converted into one U.S. dollar at the beginning of 1988, then by 2013, New York housing prices would be exactly $0 after deducting U.S. inflation.In other words, the growth rate of house prices in New York over the past 99 years is very accurate. It happens to be the U.S. inflation rate, during which housing prices have experienced a sharp decline in the 25s.
包括三菱地產於1996 年宣布洛克菲勒中心項目破產，以3．08億美元的價格，加上8億美元的債務，賣回給包括洛克菲勒家族在內的美國人；紐約 房價在21世紀初開始大幅度上漲，2006年達到頂點的1．5美元，到2013年跌回至0．99美元，完成了25年的輪迴。
類似的，如果在1988年初把波士頓的房價折成1美元，2013年漲到1．08美元，相當於扣除通脹後以每年0．3％的速度增長，其間也經歷了和紐約一樣的漲跌周期。如果在1988年初把洛杉磯的房價折成1美元，那麼到2013年漲到1．12美元，相當於扣除通脹後以每年0．46％的速度增長。
如果1988年初把舊金山的房價折成1美元，那麼到2013年漲到1．29美元，相當於扣除通脹後以每年1％的速度增長。舊金山房價漲幅最大的一個原因是硅谷造富的驅動。
The average annual growth rate of housing prices in the United States over the past 100 years is about 3%, which is slightly higher than the US inflation rate (2%).If the increase is much higher than the inflation rate, there will be no growth or a decline in the future.
This law is so precise that in these 100 years, only 1943~1947 was the only stage that clearly outperformed inflation and did not fall back.
This rule applies not only to the United States, but also to first-tier cities.By 2013, the average house price in the United States had exceeded the historical average after deducting inflation. It is not that the goods are cheap, but it means that the average annual increase in house prices in the future should be less than 3%.Whether this rate of return is high enough and whether it can achieve the purpose of diversifying investment is a matter of opinion.However, as a Chinese investor, you should know this law.
Recommended reading: "Buy a house or buy insurance? After the implementation of CRS, a comparison of strategies for investing in the United States"
(This article comes from the Internet and is published after editing and editing on this site.)
