Mortgage Rental Ratio: Apartments in these FIVE Housing Markets are Surprisingly Still Attractive!
What do you guys think of the rent to fees So throughout the last decade, the rental fees have decreased a lot. We used to think that the rental yield is around 5% to 6% right so right now it’s only 2, 3 or maximum 4 if you’re buying an apartment so today we’ll talk about the apartment so the apartment is one of the asset one of the housing Market that is the highest rental yield so what is the rental you saved about the housing prices About the housing bubble so we will talk about that right now so it’s buying an apartment a right time Now is buying apartment and rent it out a good option or if i have money should I just rent It Instead of buying one So today we’ll talk about the housing prices so first of all if you haven’t subscribed to channel? Please subscribe so and please join my notification squad and also please like my Facebook page so that Whenever i have most updated videos uploaded you’ll be one of the first ones to see the videos so now we know that many countries are launching some policies to kind of control the housing prices Including Canada because they have raised the interest rates one time and by the end of this year they may Probably raised another time and also they have a new policy for the rental market that has been launched in April this year That if you have to raise the rental fee you cannot raise the rent to fee more than the inflation rate so that means that you can only raise to the rental fee for like five to four Percent even the housing market is going up by 70 percent or even double So this news really really cool down the housing market but in the previous videos i have talked about what time indicators should we look at to determine if the bubbles are going to burst But whether or not they’re bubbles is two different Stories so today we will talk about how we should look at the rental fees and the rental yield to determine if there’s bubble or not so today we’ll talk about this and we’re first of all I’ve prepared a chart for you guys we can look at the rental yield Throughout all other countries around the world so in the blue box is the East Asia Countries and in the Green Box is other countries like America and Australia or other So-called western country maybe if you say so first of all the source is from Numbeo oh so this is a pretty good website that you can mix and match all kind of data for the housing market and you can do some research with that and Your assumption behind it’s an apartment okay it’s an apartment in the house it’s an apartment with one bedroom and 15 square meters Okay so this is the assumption so it’s not about housing again it’s not about Houses and big apartments It’s like a med to small Apartments within those countries so in the Green boxes their houses Along with those countries but in the blue boxes like Taiwan and Hong Kong Probably their apartments okay so Let’s say for the United States is Saying that The Rental Yield is as high as 11% so you guys have to really Work around this number is talked about in general the whole? America not New York and LA and San Francisco it’s in general including those second tier or third tier and fourth tier housing markets and only the apartments so for Canada is 5.6 for me personally i think that this figure is pretty accurate because last time I went to Canada with my partner he Just bought three apartments in the two weeks trip and the rental return including the management fee has been already 4%~5% Rental Yield already so it’s pretty attractive in terms of investing in the apartment, of Course, the prices, in the long run, the apartment prices are really underperforming the housing market so depending your strategy if you want the Rental income cover your mortgage as a landlord or if you Looking more of like I’m living into house or looking for a Long term investment you should look for a house but in the blue boxes is pretty much like for example, Hong Kong is just apartment right People like I can say less than five percent of those who live in a house so 2.07 Rental Yield is really the fact so we can look at the fact in terms of apartment so in the blue boxes is really really not attractive other than the country like Malaysia because throughout the past three or four years because of over the investment the housing markets has been frozen has been frozen is not catching Up the marketing law so the Rental Yield is pretty stupid pretty attractive so does the same with the Thailand and Japan Is pretty much higher than other countries but Japan the inflation and the salary has Kept Almost the same in the past 20 years so in that sense other than Malaysia and Thailand other countries are not as good as an investment or maybe we can say that there’s some kind of bubble in terms of housing market because we have to? to look at the formula the formula is a One-Year Rental fee Divided by the housing price now the denominator is the housing price now is not the buy-in price okay you have to look at that so in the green box such as The United States and Canada and Australia they’re all yielding a very good rental yield for us to invest in Terms of apartment for example Canada is really a good choice than South Africa and maybe part of the United States so you have the do a research so in terms of? apartment you can look at The United States Canada Australia South Africa maybe Malaysia and Thailand okay so we can look at another Ratio is called price to rent ratio that means many years you can rent out your apartment and You can fully pay your apartment so it’s a permanent it’s not house right if you guys want another story and our research about housing that’s fine but in terms of this you can say Taiwan has a horrible number of price to rent ratio you will say that Taiwan the housing market the price is not going up as high as Hong Kong in China right How come the price to rent ratio It’s really high because people in Taiwan probably cannot afford a high rental Even though your price has gone up a lot, i cannot pay the rent right so as a landlord you really have to cut the price in order for you to rent out the house because even one month or two weeks that your house your apartment is vacant the income will be hugely affected already so what countries are more attractive for example again America Canada and even South America has like 8 to 17 times which been renting up for 10 years to 17 years you can already fully pay your apartment so that is another Ratio we can look at so whether or not there’s the bubble some people will look at the mortgage the price ratio for example We look at the chart you can see how we can use the chart People has always miss Interpret in terms of how we should use this chart how i Interpret this chart is whenever the chart goes to 1 you should really really invest in a house or even apartment so this Chart Is in Terms of all the housing market it’s not the apartment so as you can see there’s a huge recession happen in 87 and other recession happen in 97 seven so there’s really less chance this chart will hit one what’s it mean if the Value of hits one meaning that if you pay two thousand dollars renting a house you’re also paying two thousand dollars Mortgaging and owning a house what choice would you make most likely you’ll buy a house because the only difference is your first payment and the first payment if you look at the chart most likely whenever the housing market dropped that much is always under recession and all the governments were launching some policies then It will encourage us the buy house So most likely the first payment we’re only in for 5% ~10% of the house so we can probably look at this and this probably a good chance to buy a house so the last chance that we experienced is the 2008 Lehman Brothers in the Subprime Mortgage Crisis then It is dropped to as low as only 1.1 so that is already a level that we should buy a house own apartment okay but It doesn’t say how much higher it goes there will be a bubble or the bubble is going to burst Some people miss interpret and saying that oh now is 1.3 1.6 and 1.8 the housing market will come down if you’re making such a Big assumption probably if you even had money to buy a house in 2012 you will hold your investment until now and now the housing market at least is double so don’t really often estimate and procrastinate your investment decision because procrastinating is also a cost so now globally is only around 1.3 it’s considered to be healthy so if i break It down to mortgage rental ratio we can see which country in terms of an apartment this is the most sexiest and attractive for us to invest so we can see in the blue box Japan is really attractive right Wrong Again yes the value is below one right but again the salary and inflation in Japan in the past more than two decades Remain almost the same so if we buy a house in Japan It will not work and off because in the past few years Japanese Yen has been really really weak people saying that buy a house or buy anything in Japan would be really really good investment but in fact in investment for you to yield and return the prices to go up right if the price remain the same there’s nothing for us to invest so Japan yes the number is low but not really attractive for you to invest but in terms of Malaysia and Hong Kong surprisingly is still pretty much attractive in terms of rental to mortgage ratio But another ratio in terms of apartment right in terms of mid to small apartment okay so in terms of in the western Countries including South Africa Germany the most attractive investment apartment you should invest in is the United States look at not New York and major cities in general is other average cities you can invest in their apartments and Canada Germany Probably also South Africa, so, i would suggest you can look at Germany Canada and also United State if i would have to choose i suggest Germany and Canada so those countries have really legit figures saying that is really attractive and has the stable growth that we invest in it now Probably during return in the future so last but not least we’ll look at the Money Flow so if you remember i was still in Canada i made a clip saying that looking at my secret weapon of the money flow which there are many many of the economy data outside so there’s one data that is highly correlated with the housing market I’m using that data but for now, i don’t have enough time to explain that data but i would just print out the excel result so previously i thought of Canada right so now we look at the 1-Year Money Flow which country has the highest greatest money flowing in that country we can say it’s Canada China and Hong Kong if you want to prove that is It right or not think of the housing market in Canada Hong Kong and China in last year is it good is it healthy not this year It’s last year because this is figure is last year right that really works because Canada is really Really about to bubble right and Then Government has raised interest rate Hong Kong China is going crazy going wild and If we look at year to date we look at again Hong Kong and South Korea It’s really much pretty much The money is inflowing flushing in those two Places Okay so if that works what about next in the future we can look at the past quarter okay Probably we can catch away So we can by looking at the past quarter probably we can look at the next quarter or the next half year which housing market in the country will be outperforming the market so we can see again it’s Hong Kong Not just that I’m working in Hong Kong but That’s legit figure and statistics showing that money Is inflowing to Hong Kong Maybe probably they’re going all to the stocks but most of the case is not going only to the stock market you go to the stock market and the housing market The second country Is China that you can look and the third country surprisingly is South Africa and America so combining the whole video and the research which country I mentioned the most that’s the country that will Probably yield the greatest return in terms of in the housing market so you can see again the Canada, United States, Hong Kong South Africa the second here probably Malaysia Taiwan South Korea probably Australia but that’s the homework that We should do all the viewers come from all over the world so i really appreciate your support so all my research will be pretty much more of a globalised point view so probably is also healthy for us to look at macro sense Not only micro, for example, I live in Hong Kong really It will help us more if we look at macro sense so we understand truly legit Hong Kong is going to outperform or underperform market so we can have our eyes open to the market even is that stock market Housing market or anything we have the look at macro point of view that will always help so if you haven’t subscribed the channel please subscribe and Like this video and share this video to Your friends if you find It useful and helpful if there is any other questions technical or not please comment at the comment box below So i will reply you one by one. Thank you for support. investing make easy see you next time