Population Growth Doesn’t Have The Influence That You Think”.

You mean China? India and China already have some of the most expensive real estate in the world relative to income levels.

 

Finance is the fuel to the fire. When the fire (demand) is burning the fuel will make it go ballistic. When there is no fire the fuel does nothing but sit there waiting!

 

yep, they sure do. Especially those cities that offer opportunity and jobs...you bet- will rival Sydney anyday in terms of prices...irrespective of income levels. Even someone earning in AUD or even USD will struggle to get something good in Mumbai , shanghai, etc...

 

Interesting article.

The piece that interested me most was actually the parts drawing performance comparisons between cap-cities, and regional areas.

Having attended a number of property expos and events in 2015, it feels like it is 'on-trend' for so many of the 'experts' (E.g. Margaret Lomas, Michael Yardney, and even cranky old Terry Ryder of late - who is normally very 'pro' multi-diverse-economy regionals!) to dismiss regionals this year (and going in to 2016).

I think it is worthy when thinking about population growth driving (or not driving!) property values over time; to think about regionals too.

I say this because many major regionals (Think Australia's most populous cities from position #11 - #20 on the population size ranking...) have posted substantial capital growth gains in the last few years especially, even though many of their populations have remained fairly flat. And, I'm talking the 'multi-diverse' regionals of population sizes 50,000 - 200,000 (ish), not one-horse-economy towns..

 

Look at Japan. Prices have gone nowhere because the population has been declining. It's basic supply and demand. Obviously it's not the only factor but if Australia suddenly halted all immigration and relied on natural birth rate, the prices of housing in Australia would at best stagnate imo.

 

You can't compare two different places and say "See... population doesn't make any difference"
If everything else is kept constant then population WILL make a difference.

 

If we list countries by "obsession with real estate". Australia will likely rank in the top 5. That makes a big difference compared to a country like the US where CG is low and yields are good.

 

But parts of the US have seen significant CG. Im thinking places like san francisco.

 

San Fran falls into the Hong Kong, Singapore, Vancouver 'bucket' whereby it is a high demand and highly desirable place to live, that is squeezed by geographic land and/or sea boundaries. These kinds of places tend to do very well and host very expensive housing.

Some would argue that Sydney is in a similar situation; in many ways land (national parks in every direction) and sea-locked... but with very high demand due to desirability to live there.

San Fran though has an even greater cap on physical growth, being architecture restrictions. Earthquake-compliant planning restrictions make it hard for developers to build 'up' there, and obviously the land and sea barriers prevent the building 'out' prospect somewhat (San Jose and less desirable areas are being built out but their distance to cbd is quite far to commute). This keeps prices high in the city. Kinda like Vancouver actually.

 

I will check out the properties in San Fran and Bay area next week while holidaying.

 

and of course the common factor in all the cities you mentioned --> property prices pushed up artificially by communist Moolah!!! just google and you will be shocked the amount of commercial and residential RE bought by them all over the world all at premium prices. There is no consideration for fundamentals, just pure speculation. Its all a big Ponzi scheme exported to the world by the experts at exporting..

Chairman Xi is now trying very hard to contain the constant outflow of funds which will eventually leave the country's finances in a very bad shape.