This summer in Shanghai prices have literally flown through the roof and people still keep buying.

Every time my wife open’s up her mouth she’s telling me about one of her stupid friends buying a house. I have to keep telling her that it’s not a house, it’s an apartment. Every time I hear about it I have to shake my head. If the combined income is not more than 30’000 Yuan a month how can one afford to buy a house apartment in Shanghai?

If with a combined salary of over 40’000 Yuan perhaps you can pay the loan off in reasonable time; but in actuality, in Shanghai who really makes that amount? Maybe 5% can reasonably afford to buy apartments at these ridiculous prices but around 80% are buying.

I and my wife’s combined income has almost reached 40’000 Yuan a month after taxes, but we have not even fathomed about purchasing (also her father said that he won’t contribute a dime because she married a foreigner) property in Shanghai; while on the other hand her friends who make half of what we do are putting down payments on 3 million Yuan properties in the middle of Huai Hai Lu. Let’s not forget that we all have children. All of them happen to have cars.

One of my wife’s friend’s husbands had a perfectly working car. All of his workmates upgraded to those gas guzzling Ford Expeditions. Because he wanted to be down he sold his perfectly working car for a 400’000 Yuan monster. The wife only makes around 4500 Yuan a month, while he’s pulling in around 20k.

I have seen this mass mania before. I was around during the tech boom of the 2000’s when everyone in America was trying to get their hands on a dot com stock. The 2009 collapse of the financial system because of subprime mortgages ruined countless lives.

I refuse to even think about buying because

1. We can’t afford it

2. Paying 500k USD for an apartment in an overcrowded and polluted city is absurd.

3. By the time down payment is finished you must give it back to the government.

4. With more than 25 million people concentrated in a handful of areas prices should be falling not rising. This is a bubble waiting to happen.

5. If I could afford to buy a home here what assurance do I have that I won’t be drilled to death by the renovation next door?

6. If the govt. decides to build a highway through your complex, who are you to stop them?

Everyone one I talk to is saying there will be no bubble. These are the exact symptoms of a mania. Some people are saying when the bubble does burst home buyers won’t be affected that much because Chinese don’t hold mortgages. This is not true. All of my wife’s friends represent the average Chinese. They all have mortgages. They all will be house(apartment) slaves for a very long time. I mean really where do you think the term house slave comes from, and implies?

I worked in Wuxi over the summer. Wuxi is only 40 minutes from Shanghai, and prices are still over the top; but much more reasonable. I saw a 38sq unfurnished loft for around 270’000 Yuan. This is unheard of in Shanghai, even in the most remote areas. Wuxi is also less crowded than Shanghai, and there is a noticeable difference in air quality. On average people are much nicer, and it is much quieter.

I believe just by gut instinct that your average home in your average neighborhood in Shanghai should not cost more than 600’000 rmb. The average income person in Shanghai is around 7-8000 rmb per month. The apartments near where I live in Pudong are going for 5-9 million rmb.

I just feel bad for the regular Zhang the plumber; who in order to get a woman, has to shell out more than 2 million rmb. I have to be honest. The Shanghai girls I have met so far I would consider paying someone to keep them away from me.

Anyway who am I to point fingers? America is 17 trillion in debt and is about to go to yet another war with Syria. Go figure.