‘Houses should be for living in, not for speculation,’ President Xi said one year ago. But he finds status quo is hard to change.
China’s private property sector exploded, made possible by the market reforms and opening up policies that began in the late 1970s, and the countless millions of people who started moving from the countryside to cities.
Tight capital controls and painful memories of the 2015 stock market crash reinforced people’s belief that property is the best nest egg.
a bias toward male children during the one-child era has left a skewed sex ratio, parents and grandparents often pile their savings into a home to boost a male child’s marriageability chances.
In addition, school options are closely tied to home ownership, leading parents to buy “school district homes” – xue qu fang – whose purpose is not to live in, but to get a child into a top school.
If you want to stop any speculation from taking place with houses then the government needs to own them all and just assign them to people, that would stop it.
Govt needs to warn people about the danger of speculation but should not prevent people from doing so. It should also bail people out if things turned south…
Rental yield in many Chinese cities are super ultra low. We are talking about even lower than SF. Mortgages can be tricky too. I’d much rather buy in Hong Kong.
