Article/Tan Haojun, columnist of Sina Financial Opinion Leader Column (WeChat public account kopleader)
A post "What kind of house does 100 Magnum buy in the United States" was once popular throughout the network. As a result, unknown netizens began to believe that it was very cheap to buy a house in the United States. They hoped that one day they could buy a house in the United States, preferably a high-end villa. More netizens are asking why Americans don't buy houses since American house prices are so cheap?
First of all, the so-called cheap house prices in the United States are only relative to the income level of residents. In terms of absolute price, the house price in the United States is not cheaper than that in China, but much higher than that in China. Therefore, Americans do not like buying houses as much as Chinese people, which is determined by many factors.
1、 It is determined by American consumption concept. The United States is known as a consumption oriented country. The so-called consumption oriented country means that residents are not very willing to save money but like to spend after they get income. Such as shopping, tourism, cultural consumption, etc. That is to say, once you get the money, it will soon be converted into consumption. Therefore, after the global financial crisis, once the employment situation in the United States improves, consumption will immediately play a role in stimulating the economy. On the contrary, if the employment situation of residents is not good, the pulling effect of consumption on the economy will decline. This is why the most important indicator to measure whether the US economy is recovering is employment, which is also here. Just because Americans don't like to save money, the savings rate in the United States is less than one tenth of that in China, and at the lowest point, the savings rate is less than 1%. The highest is less than 6%.
2、 It is determined by the American housing concept. Unlike the Chinese, Americans save their money first when they have money. In addition to arranging basic daily consumption, most of the money is deposited in banks or other accounts that can maintain and increase value. Among them, house purchase is the first consumption demand of the majority of residents. With the rapid rise of house prices, savings have less and less influence on house purchase, and more needs to be solved through debt. On the contrary, when it comes to housing, Americans first choose to rent, that is, according to their income level, choose a rental house that they like and that matches their income. If the income level is high and the rental housing is relatively good, if the income level is poor, the rental housing with slightly poor conditions will be selected. And they will never affect their normal consumption because of the housing problem, nor will they let themselves bear a heavy debt burden for housing. Therefore, the proportion of rental housing in the United States is very high. Of course, in the United States, although the income level is high, more than half of the residents can't afford to buy a house compared with the house price, so renting a house will become the first choice for American residents.
3、 It is determined by the management system of the United States. When Americans buy a house, they will not only need to repay the loan like China, but also pay all kinds of fees, that is, the maintenance fees. It includes property tax, insurance premium, property fee, maintenance fee, etc. If leasing, the individual income tax of leasing shall also be paid, and if transferring, the capital gains tax shall be paid. Especially the property fee, the most expensive one is $6 or $700 per month. Just after the outbreak of the financial crisis, no one bought some villas in the United States for one dollar. The reason is that many residents can't bear the property fees that need to be paid after the house is taken home. What's more, most residents do not have so much savings. Once the employment situation is poor and the income is not guaranteed, they may not even be able to pay the property fees. Not only that, the inheritance and gift tax also makes Americans unable to let their children accept the inheritance of the house after they buy the house, nor to give the house to others through donation. Therefore, if you choose to rent a house, you may encounter less trouble and pay less price.
4、 It is determined by the independence of young Americans. Most young people in the United States, once they reach the age of 18, put independent life first and rely on part-time jobs to support themselves, rather than choose to gnaw at the old age. Buffett's son is like this. He never asks his father for a penny, but relies on his own strength to start a business. Because of this, American parents do not need to save money to prepare housing for their children. It is precisely because of the strong independence of young people that buying a house in the minds of Americans is not a matter, let alone a burden. If you have the ability, buy a house; if you have no ability, rent a house. The vast majority of young people choose to rent houses, and only a few people buy houses when they have the conditions.
(About the author: researcher of China Non performing Assets Industry Alliance)
