Interesting Chinese article "How long does it take you to buy this home?"

Here is an interesting Chinese article about what some are calling “the most hopeless music video in the history” (of videos?)

How long does it take you to buy this home?

In the traffic congested city streets, an advertiser was busy handing out flyers for the newly constructed condos. “Beautiful homes, starting at 29,800 yuan per square meters”, one flyer ended up in the hands of a cab driver who was waiting in traffic. He looked at the flyer and thought “It takes 125 years in order to buy this home”. That made his nose bleed.

A young man got into the cab and picked up the flyer on his way to work. Up in the elevator, punched his time card at exactly 9 am, he rushed into his cubical to start his day of work. Then he read the flyer and thought “It takes 87 years to buy this home.” Foaming at the mouth, he threw the ad into the trashcan.

A cleaning worker lady at this company picked up the trashcan and also saw the ad. “It takes 255 years to buy this home”, she broke into tears.

A rich boss got the flyer, accompanied by his mistress, he went to the real estate office in his Mercedes Benz. Looking at the miniature model of the residential community, he thought “It takes 5 days to buy this home”. But he soon was distracted by the beautiful real estate agent and started drooling over her. Woken by the fist of the unhappy mistress next to him, “I will take 5 of them” he said. The mistress seemed to be still unhappy and gave him a good nudge on the shoulder, “oh no, I will take 6” he reacted quickly. Now she was happy and thought, “It takes 1 nudge to buy this home”.

While the homes are still being constructed, a construction migrant worker of the homes picked up the ad. Looking at it, he thought,“It takes 514 years to buy this home”, blood dripped down under his helmet. Buried in this thought while working on the high rise, he slipped and felt from the building…

The music video mocks the sky-high real estate prices in China. A home that costs 29,800 yuan per square meters triggered different reactions with people of different social classes in China. What (or how long) does it take to buy a home?

(TLDR section)

29,800 Yuan per square meter is about $415 a square foot. Downtown Los Angeles residential is about $380 per square foot.

There are a lot of variables but this is for a simple comparison sake. A nice 2 bedroom 1,000 square foot condo in downtown Los Angeles would cost about $380,000. In a Chinese city (lets say an equivalent of Los Angeles for assumption sake) the same 1000 sq ft condo or home would be $415,000.

California minimum wage would be about $15,000 per year full time. A good estimate on what a family should spend on housing is about 1/3 of income. An assumption would be a person making minimum wage can pay off a 1,000 sq ft home in downtown Los Angeles in about 80 years. The article probably doesn't make the same assumptions and probably just goes home price/wage. This would be about 25 years.

If it took someone 5 days to afford such a home, they would probably be making $18 million a year.

(my math might be wrong, it is pretty late)

(TLDR section ends)

It is interesting to see what appears to be a Chinese housing bubble inflating in a highly stratified economy.

What this means to the world in the future is beyond me but if the U.S. housing bubble caused such mess, what will a Chinese housing bubble cause while we are still sifting through current problems? Will there be a big pop like we had? Will China degenerate into social chaos or brutal repression? Will they cash out on U.S. debt out of necessity?

Another interesting thing is that many elites admire the Chinese economic model. This means they admire a highly stratified system where most people are relatively poor and the few rich practically own the country. We in the U.S. seem to be much more fortunate than our Chinese counterparts but the designs are already laid out especially the way the economy is headed.


[edit on 2-7-2010 by wutone]