Why are Housing Prices Around the World so Different
Everywhere we go the cost of housing goes up and down. Why is this you ask? Believe it or not, there are several very logical reasons for these price differences. In terms of inside the same country, price differences are simply a result of the area; when it comes to the differences between countries, however, there are a number of factors. Here are a few of them to help shed some light on this.
The Worth of the Country’s Currency
You all know that different countries have different currencies and that each currency has a specific worth per unit. The U.S. dollar, for example, is worth around 8 times more than the Chinese RMB; but the Chinese RMB is worth 7 times more than the Philippine Peso. You would think then, that the prices of housing would differ by the same figure for each country, right? A fair assessment, but that is not always correct. You see, due to the differences in value for each currency, even if you have the same value of money in that currency, it is still worth less in the long run. For example, the worth of one U.S. dollar in the United States will only get you a few candies or something. If you have the same worth in Chinese RMB, which is 8 RMB, you can almost buy yourself a full meal. So even though the two currency amounts equal the same value, the value of the U.S. dollar is still higher. This is one of the factors that cause some countries to have cheaper housing prices. So, if you wish to buy a cheap house, move somewhere that has a very low currency value!
Cost of Living Differs
Depending on what country you live in the average monthly work pay and cost of living tend to change. More often than not the two balance each other out. For example, in New Zealand, minimum wage is the equivalent of 20 U.S. dollars per hour, but the cost of living can go anywhere from 300-1000 dollars, depending on your lifestyle. In Hong Kong, there are people who will be paid anything as low as 3 U.S. dollars per hour; however, the cost of living in Hong Kong can go as low as 50 U.S. dollars if you know where to look. So if you have a job in New Zealand that you’re capable of doing from Hong Kong, maybe you should consider that. You could save yourself a ton of money!
Prices Adapt to What People can Afford
Property owners in various countries have no choice but to adapt their prices based on what the general population can afford. If property owners in India tried to sell their houses at the same prices as the U.S. not many would be able to afford it. This ties in somewhat with the cost of living. Because the cost of living is so low in places like India, Philippines, etc., the wages for an hour of work are also low. Due to these coinciding factors, properties also adjust their prices based on the prices of the things around them