A large survey was taken late last summer, including 99,000 individuals (28,000 households) about their household finances. Among them, the vast majority of people have been putting their savings into their homes. There have been large down payments and soaring prices, and “even if housing prices halve, only 5 percent of homes would be worth less than the remaining balance on their mortgages, the survey found.”
Many households invest in their homes rather than securities, and because of this trend housing prices in the past decade have increased by twentyfold. In addition, this rise in housing prices is due to the connection of smaller cities and towns to larger cities by high-speed rail lines. If there is a dramatic fall in prices, the population of China will be furious. The government has been trying to slow the growth of housing prices by forcing banks to require 30 percent down payments for homes, and for any subsequent homes not allowing an individual to take out a mortgage. I wonder what effect the rising housing prices has had on the urbanization and migration of China.