Some time ago, the central bank released a survey report, from which we can explore the mystery of the rise and fall of house prices. According to the survey, the average total assets of urban households were 3.179 million yuan, with a median of 1.63 million yuan. The difference between the mean value and the median value is large, indicating that the household assets are not evenly distributed. The assets owned by the lowest 20% of households accounted for only 2.6% of the total assets of the sample households, while the total assets of the highest 20% of households accounted for 63.0%, among which the total assets of the highest 10% households accounted for 47.5%.
The household assets are mainly real assets, with housing accounting for nearly 70%, indicating that Chinese people have an unusual preference for real estate. Family total assets of up to 20% of total assets accounted for 63.0%, and considering the Chinese preference for the property, they should have more than 65% of the house, and the vast majority of all achieve financial freedom, house prices rose to high they may sell a set of two sets of house, the house fell they can hold for a long time, anyway, they cost almost nothing to hold. The bottom 20 per cent of households own just 2.6 per cent of assets, the equivalent of not owning a house or even being able to enter the property market. The remaining 60% of the households own 35% of the houses, and many of them are still occupied (assuming 25%). Therefore, less than 10% of the houses are actually used for speculation. That is to say, a 10% increase in the house price will push up the whole house price. A 10% decline in house prices does not lead to an overall decline in house prices, because 90% of houses are self-sustaining and they do not come on to the market when house prices fall.
So, is there a bubble in house prices? There are! Will house prices fall? It is difficult to! There is only one solution: impose a property tax that raises the cost of owning a home for households with up to 20% of total assets, forcing them to sell fewer homes and putting more on the market.