Overall housing prices in China increased by what, 11% or so in 2009? It seems high but it just so happens that the average wage in China in 2009 also increased by around 11-13% (Wage increases have tended to fluctuate between 10-20% per year for many years now).
It certainly doesn't seem that housing prices, as a whole for the country, have been outgrowing the purchasing-power increase of the Chinese people.
Given the influx of new rural people into the larger cities, it would be expected that demand in those locations would be higher, thus skewing supply/demand balances, and the property price increases in those locations would be greater than the overall nation-wide wage increase. Certainly, over the long term, these cities cannot keep having their property prices increase at a faster rate than say what the top 10-20% in wage-increases are getting...Otherwise the propeties would eventually price themselves out of a market. My point being, these cities could have their housing prices continually grow at a *somewhat* above-wage-national-increase-average and still remain sustainable...As long as the growth rate does not exceed the wage-increase percentages of the 'top wage growers'.
God I babbled alot there. Hope some of it makes sense.
-Fernando
