(Yinghui’s Shanghai home is about 65 sqm total. Private area? presumably around 50 sqm.)

When I say”bubble-like” I refer to the extent to which property prices rise above wage, rent and CPI levels. For example, Beijing is “way too high” by this definition.

However, such a “bubble” may keep growing without burst because of the big paradox — that many global city property valuations defy gravity and seem detached from economic reality.

Those wait-and-see investors often regret as the unit they didn’t take up double in valuation again and again. Reality trumps reasoning. When you find yourself in such a reality, you adjust your reasoning and accept that Shanghai downtown psf price is indeed higher than NY and feels like a mansion.

In such a market, rental yield isn’t important so shops may not be so special.

I also blogged about rental yield of China cities vs Singapore HDB.

But today I want to zoom into the Chinese factor — Chinese investor everywhere tend to go overweight on properties relative to other assets.

• eg: California — My UChicago classmate (Jon Chao) told me that in California many Chinese families own multiple properties.
• eg: BGC — big buyers come from Singapore and Hongkong
• eg: Sydney
• eg: Vancouver

My hypothesis — the bigger a herd of Chinese investors in a city, the higher this herd instinct, the higher bubble tendency we will see.

Note Singapore HDB is subject to severe restriction, so lower bubble tendency.