Via zerohedge, I found a rather interesting article about property value in Bejing, China. Specifically, several weeks ago the Bejing News reported that new home prices there had plunged about 27% month over month. This is only for new homes, and I have no idea how much of their Â real estate market consists of new construction vs. resale. In a bid to fight inflation, the Chinese government is also expected to continue efforts to slow the growth in real estate values, with a goal of price stability in the real estate market.
The current exchange rate with the Chinese Yuan is one dollar to 6.425 yuan (the yuan doesn’t float freely; the exchange rate is set by the Chinese government). The average April price for a square meter of Bejing real estate isÂ CNY19,679. A square meter is roughlyÂ 10.76 square feet. Do the math all the way through, and you have CNY19,679 = $3,027.40. Take that amount and divide by 10.76 and you have a price per square foot for April 2011 in the Chinese capital of $281.36 per square foot.
Which, compared to San Francisco is pretty much a bargain. However, the United States (and San Francisco) is a much wealthier country than China so while we may look at that price and think it is a bargain, for the average Chinese real estate buyer I’m sure it feels incredibly expensive. Bejing also has a population that in 2010 was just shy of 20 million people, while San Francisco has yet to break the 1 million person mark, so we aren’t exactly comparing apples to apples.
Either way, I thought that since we hear so much about China and the Chinese economy in the American news it would be interesting to do a quick comparison of current real estate values and real estate trends between San Francisco and Bejing. Have a wonderful weekend!