If It Were Truly Scarce, You'd Need Connections to Buy It, Or Outsiders Would Never Even Know About It

@DailyLifeOfABeijingDrifter: I got a call from an agent pitching an apartment at the MGM Residences in Songjiazhuang. It's a small duplex of over 40 square meters, priced at just over 2 million RMB. The monthly rent can reach 8,000 RMB, which calculates to an annualized yield of around 4.5%, and it requires full cash payment. Properties with this kind of yield are considered scarce assets in Beijing, much higher than bank deposit rates.
I told him that if I had 2 million RMB in cash, I would just pay off my mortgage early. Why would I buy your 4.5% annualized yield apartment?
He said, "Hasn't the existing mortgage rate dropped to 3.9%? It's going to drop further next year. At 4.5% versus 3.9%, not only is the advantage mine, but the advantage is expanding!"

Don't listen to this bullshit. Scarce my ass. If it were truly scarce, you'd need connections to buy it, or outsiders would never even know about it—it would be entirely absorbed internally. In short, don't buy apartments. (This post was published on 2024-11-2)

@DailyLifeOfABeijingDrifter: Latest update: the lowest listing price for the same unit type is now 1.77 million RMB, and rent has dropped to 6,400 RMB. (This post was published today)