Youth Population Falling, Home Prices Will Follow in Decades Ahead

The absolute number of people moving to the cities is falling. In terms of the growth boost from urbanization, the peak has passed. Furthermore, since urban populations have lower fertility, the expected population growth must be adjusted lower if the current urbanization push successfully accelerates the urbanization process.
In fact, if you take out inflation, twenty years from now the cheapest thing in China may be a house.
An example:
Ten years from now the house may be cheap based on per capita income. Such as the present per capita monthly income is 3,000 yuan, the average home prices is 8500 yuan per square, and a decade later the per capita monthly income is 10,000 yuan, the average price of housing may is 12,000 yuan per square, relatively speaking, houses will be much cheaper. Far from maintaining its value, the house will suffer a serious devaluation!
This would require annualized wage growth of about 13%, versus housing price growth of 3.5%.

Chinese wage growth is slowing with the economy, down to about 8% annual growth currently. In order to get to 13%, a simple path is 5% inflation (currency devaluation likely playing a role here) on top of current wage growth. If home prices rise at 3.5% per year and inflation is 5%, depreciation is 1.5%.
According to statistics, the proportion of the population aged 0 to 14 years has been falling since the 60s and 70s of the last century to the present, all the way down to 16.6% in 2010. In the next 10 years, the number of childbearing women aged 23 to 28 years will shrink 44.3%. If there is not a significantly increased fertility rate, the proportion of the population aged 0 to 14 will fall to 10%.

In this regard, demographers judgment, China's negative population growth trend has been set, the biggest risk facing the 21st century is negative population growth. Even now open to restrictions on the two children, but to raise a child contradiction current consumption and income, it is difficult to make policies to bring population growth stimulating effect.

Chinese society has now entered the "aging" country, in another ten years, China will be a more aging society, young people will become "scarce," demand for housing will be significantly reduced.
High home prices further reduce fertility by making family formation more expensive. The article also discusses a point made previously by Chinese forecasters: future "only grandchildren" will inherit at least three homes.

The article also discusses how, thanks to land sales, local government expenditures grew 10 times faster than revenue collection. Without land sales, local government spending growth cannot be sustained.

iFeng: 外来人口将会是负增长 房价或20年后最便宜

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