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.
绿地集团以50亿美元购得美国纽约布鲁克林的大西洋广场项目。复星国际以总价格7.25亿美元购得纽约的第一大通曼哈顿广场。SOHO与巴西财团联手以7亿美元购买了美国纽约通用大楼40％的股权。中国平安以24亿元买下了英国伦敦地标性建筑劳合社大楼；万科亦表示将进军曼哈顿的摩天大楼……中国企业在欧美大都市购房狂潮的背后，是中国高净值人群的移民潮。
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 big 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
根据美国最权威的凯西·席勒(2013年诺贝尔经济学奖获得者)房价指数，从1890年到2013年的123年中，有28年是下跌的(占23％)，95年是上涨的(占77％)。其中跌得最深的是2008 年，即金融危机最糟糕的一年，跌幅达18％。连续下跌达到5年的只有两次，第一次是1929～1933年的大萧条时代，累积跌幅达26％；第二次是2006～2011年由房地产泡沫破灭引发的金融危机，累计跌幅达33％。
Figure 123: The history of U.S. housing prices 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 XNUMX 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.
美国在过去123年中发生过3次十年累计涨幅超过100％的阶段，分别是1938～1954年、1969～1986年和1995～2007年。1938～1954年间的地产大牛市是因为1943～1947年因二战带来 的工业和消费需求，这5年的年均涨幅为17％，扣除通胀后的平均涨幅仍然有10％，其余年份的平均涨幅只有2％，扣除通胀后是负增长。
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, American housing prices 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.
如图二所示，1960年第一季度到2013年第一季度间，美国平均房租对房价比率为4．98％。21世纪初的房地产泡沫，表现在房租对房价比率从1999年初的4．8％下降到2006年第一季度的2．98％，下降比率达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 it experienced a sharp decline in house prices in the 25s.
包括三菱地产于1996 年宣布洛克菲勒中心项目破产，以3．08亿美元的价格，加上8亿美元的债务，卖回给包括洛克菲勒家族在内的美国人；纽约 房价在21世纪初开始大幅度上涨，2006年达到顶点的1．5美元，到2013年跌回至0．99美元，完成了25年的轮回。
类似的，如果在1988年初把波士顿的房价折成1美元，2013年涨到1．08美元，相当于扣除通胀后以每年0．3％的速度增长，其间也经历了和纽约一样的涨跌周期。如果在1988年初把洛杉矶的房价折成1美元，那么到2013年涨到1．12美元，相当于扣除通胀后以每年0．46％的速度增长。
如果1988年初把旧金山的房价折成1美元，那么到2013年涨到1．29美元，相当于扣除通胀后以每年1％的速度增长。旧金山房价涨幅最大的一个原因是硅谷造富的驱动。
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.)
