Can the Young Chinese Afford Housing Now?

Published on Author Christine Feng
Housing under construction in Xiamen

Growing up in China, I’ve been educated that when people are married, the guy’s family needs to provide an apartment for the young family, either new or old. In recent years, with the high inflation in both consumer goods and real estate market, young people have been complaining about not being able to afford housing to get married, even though it’s typical for the guy’s parents to pay down payment as a gift. The real estate market in China has been controlled by the Chinese central government for the past three years, so many real estate companies are facing high debt and inventory level. With the change of leadership in China, both the citizens and real estate companies have been trying to predict the fluctuation of market price for housing under a new set of regulations. Yesterday, WSJ published an article talking about the “hopes” for buyers in the housing market. In the article, the journalist states that since disposable income in China has risen about 49% starting 2009, and housing price only 11%, young people are getting hopes to afford housing. However, Chinese people have always been suspicious about the official data that Chinese government publishes, and many of them, especially the young generation, hardly get real benefit from the 49% rise. Many people are starting to buy real estate for marriage now, since they heard rumors about the rise of the housing price. This has pushed a new high for bigger real estate companies’ performance in the stock market.


2 Responses to Can the Young Chinese Afford Housing Now?

  1. So what does this structure imply about savings rates? about the divide between people whose parents live in the countryside and those from the city?

    But I think we’ll find that government controls in the housing sector — especially central government controls — have proven weak or non-existent. As to data, even in the US it wasn’t until the Case-Shiller index (Shiller is a Yale prof, Case is retired from ?? Wellesley) that there were data where the “base” was consistent. Real estate, after all, is idiosyncratic, and it’s hard to get data on transaction prices unless housing is financed through debt that is then registered against land titles as a mortgage, and hence made public. In China cash transactions dominate, so … who paid what is not transparent.

  2. Global housing experts say that the Chinese real estate sector is going to remain healthy in spite of the minor ups and downs. little to worry, I guess.