So, if you are considering buying your first house, that is, your own house, I would suggest that you consider holding this fund and start buying your own house after the housing market is stable, because it is just needed, and it does not belong to the same asset type as pure investment in dollar savings, because it cannot be compared. Therefore, I didn't agree with the idea of "buying a house to make money or saving dollars to make money" from the beginning. After all, it will be better for us to discuss "how to choose" after we have made clear the purpose of buying a house.
Then, if we simply consider the question of "whether it is cost-effective to buy a house or save dollars" from the perspective of investment, I also hope to make a rational and objective analysis according to different situations.
First of all, we know that there are two ways to make a profit by buying real estate. One reason is that it is very common in Chinese mainland. Everyone hopes to sell this house in a short-term or short-term and earn the difference brought by the appreciation of the house, thus making a profit. In this case, if you compare "buying a house" with "saving in dollars", there is no way to guarantee which one is more cost-effective. It can only be said that if you catch up with the good time to buy a house, for example, you bought a house three or four years ago or even earlier, then now is naturally the best time to sell a house. In this case, buying a house is naturally more profitable than Hong Kong's dollar savings. If you start to buy a house at a historical high price, the benefits of buying a house will be immeasurable due to the future market development and the uncertainty of national policies. Simply put, if you save in dollars, its return is to repay the principal in the first eight years and then double it every eight years, because this is the calculation method of compound interest.
The second way to make a profit by buying a house, which I prefer, is to invest in real estate, then hold it for a long time and earn a return by collecting rent every month. This has many advantages. First of all, the stability of rent will be better, provided that the vacancy rate of the house is not too high. The usual method is to reduce the rent appropriately. This is very demanding for the city where you buy a house. Cities should be developed enough and people should be rich enough. The best example is Hong Kong. In Hong Kong, there is a saying called "three rooms for a lifetime". To put it simply, people have to buy three suites in their lifetime, one for their own living, one for sending their children and one for collecting rent. Therefore, most local people in Hong Kong want to be rent brokers. After all, residential buildings in Hong Kong are never enough and can be rented out at any time.
At this time, we will simply calculate the rate of return on buying a house in Hong Kong, and then compare it with the US dollar savings. At present, the highest rate of return on houses in Hong Kong is Royal View Bay, which is cheap to buy and expensive to rent. "Buy cheap" is because Hong Kong locals generally don't like Royal View Bay, because on outlying islands, the traffic there takes half an hour to get to the city center, so for Hong Kong people who are pursuing speed and efficiency, the houses there are not easy to be favored, so the house prices can't rise. But renting a house is very expensive, because the outlying island environment of Yujingwan is very popular with foreigners, and a large number of foreigners in Hong Kong live in suburbs or outlying islands. Because the environment and air there are better, shopping is actually quite convenient. Foreigners who have no intention of living in Hong Kong will naturally not consider buying a house in Yujingwan, but will consider renting a house in Yujingwan. This is the reason why the house in Yujingwan is cheap to buy and expensive to rent.
Because I graduated from the Mathematics Department of the Hong Kong Polytechnic University, I am sensitive to numbers. Let's do a simple calculation. A 40-square-meter Yujingwan villa costs about HK$ 3.6 million, and the monthly rent is HK$ 654.38 +2000. If you buy a house in Hong Kong, you can make a down payment of 20% if the conditions are good, and the loan interest rate is about 2.0%. If you take out a loan for 30 years, you will pay HK$ 9,000 a month for the mortgage, with a monthly net income of HK$ 3,000 and an annual income of HK$ 36,000. Your total investment is about 900,000 Hong Kong dollars, plus legal fees and various taxes. To put it simply, we invested 900,000 Hong Kong dollars and got back 36,000 Hong Kong dollars every year, with an annualized income of 4%. If it is deposited in US dollars, it will be annualized by 5 points in the short term and 7 points or more in the long term (more than 20 years). It will be more cost-effective to deposit in dollars this way.
What's more, our analysis of the house still assumes many optimistic situations. For example, let's assume that the vacancy rate of the house is 0 (this is easy to do in Hong Kong, but in the mainland, even the core areas of big cities rarely have such a low vacancy rate); Secondly, the down payment ratio of buying a house in Hong Kong is relatively low, and the mortgage interest rate is much lower than that in the Mainland. These advantages help us to get a higher rate of return when investing in real estate.
The example I just gave is the situation in Hong Kong. In fact, from June 65438 to July 2005, due to the threat of interest rate increase by the Federal Reserve, the housing prices in Hong Kong have been in a downward trend. It was not until July 65438+July 2006 that the housing market slowly picked up. Compared with the mainland housing market, the advantage of Hong Kong's real estate market lies in obtaining relatively stable returns by collecting rents. In addition, because the mainland real estate market continues to grow as in the first half of this year, buying a house in the short term is naturally faster than saving dollars, but the risk is also considerable!
So we found that if you take real estate as a short-term arbitrage means, there is no way to compare it with dollar savings. After all, dollar savings is actually a long-term investment to meet the urgent needs of education and old-age care. Therefore, stability is the primary consideration of this kind of investment.
If you take real estate as a long-term investment project, then I would suggest that you choose the core area of a big city. However, because the vacancy rate of urban housing in China is as high as 22.4%, and the vacancy rate of stall housing in first-tier cities is around 8%, it is necessary to carefully consider buying a house and collecting rent in the Mainland. In the most ideal situation, such as Hong Kong, the return rate of buying a house and collecting rent may reach 4 or 5 percentage points. However, compared with dollar savings, the rate of return in the fifteenth year has exceeded 5% because of the compound interest calculation method. So in the long run, the yield of dollar savings will be higher.
Author: Macey financial theory.
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Source: Snowball
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