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Q: Why are housing prices still rising despite the fact that most people cant afford them?

Do they want the younger generations to be house-less or why on earth are prices still rising?

9 years 27 weeks ago in  Housing - China

 
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Even though the majority of people cannot afford apartments, there are those who can, who buy more than one. It is seen as a bulletproof investment as there has never been any (big) drops in the pricing since private property ownership was allowed to common folk. 

 

The last couple of years there has been legislation around limiting how many properties people can buy, there is taxation on profits from selling them etc. This just makes people find loopholes in the system and people are still buying apartments like it was candy. As the construction of property is a significant contributor to the country GDP, and there are millions employed in construction, the government cannot/do not want to stop this completely. 

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9 years 27 weeks ago
 
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Even though the majority of people cannot afford apartments, there are those who can, who buy more than one. It is seen as a bulletproof investment as there has never been any (big) drops in the pricing since private property ownership was allowed to common folk. 

 

The last couple of years there has been legislation around limiting how many properties people can buy, there is taxation on profits from selling them etc. This just makes people find loopholes in the system and people are still buying apartments like it was candy. As the construction of property is a significant contributor to the country GDP, and there are millions employed in construction, the government cannot/do not want to stop this completely. 

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9 years 27 weeks ago
 
Posts: 1198

Shifu

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so same question just 3 years later...

prices keep raising, at least in shanghai.

But i heard prices dropped in Shenzhen and many leave shanghai because normal folks cannot survive

 

Anyone can say something about housing prices in shenzhen?

Hotwater:

Where did you "hear" Shenzhen prices had dropped?

 

They've increased 72.12% in the last year!

 

http://africa.chinadaily.com.cn/china/2016-03/04/content_23738737.htm

 

 

6 years 27 weeks ago
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dom87:

my wife told me yesterday and cannot believe it thats why i asked.

in shanghai the prices raised by 20% in the last 2 month

6 years 27 weeks ago
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6 years 27 weeks ago
 
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Seems I read an article in the news recently that the Chinese Govt was unwilling to let the "Housing bubble pop". Im sure there are more knowledgeable folks here on ECC that will be able to answer your question more thoroughly.

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6 years 27 weeks ago
 
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Housing bubble won't pop in top tier cities.

That is because beyond a property, ownership allows (usually) a Hukou transfer, which entitles people to much better welfare/healthcare/education/etc than whatever they had back in the village. It's a package, and it's also part of why prices seem higher than what they're actually worth.

Exactly the same phenomenon as when they buy property abroad. They don't go to Canada for the weather.

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6 years 27 weeks ago
 
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since the rules changed on property ownership
a lot of middle class have bought houses overseas .
in fact it has become a hot topic of contention in Australia and now with a election in July there will be much more debate

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6 years 27 weeks ago
 
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Emperor

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Housing prices have begun escalating again becaue they are back to being used as investment instruments since the stock market bottom dropped out. The prices will become a probem if or when buyers start overloading on credit to buy property. I don't know what the percentage of cash buyers verses credit, but with the economy faltering, credit defaults will rise and....

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6 years 27 weeks ago
 
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Some people find inventive ways to buy a house.

 

Let me share a personal anecdote:

 

Last year FIL was diagnosed with cancer. A whip around was done amongst the relatives to pay for treatment which raised a considerable sum. Sadly, he passed away a few weeks later.

 

Rather than return the money to everyone, BIL, who was in charge of paying the bills used the cash to buy a 150 square meter apartment downtown.

 

Everyone congratulated him on his upmarket new domicile.

 

I'm an arsehole because I said "WTF"

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6 years 27 weeks ago
 
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And add rents to this. People asking for 1st tier rents in 3rd tier cities. No one bites, places sit empty for over a year. Offer a reasonable rent for the place only to have the owner refuse.

 

philbravery:

i agree with you however may i add that it doesn't matter what price you put on something somebody is willing to pay it . remember that saying about fools and money will soon be parted I'm sure it was a Chinese saying lol

6 years 27 weeks ago
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6 years 27 weeks ago
 
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Because people buy flats as a form of investment so cash and demand keep flowing in... for now, we all know what will happen and it's going to be ugly, but Chinese people are still new to capitalism so they refuse to believe it and then they will blame evil Foreign forces when they lose most of their investment.

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6 years 27 weeks ago
 
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Rising house prices are a result of economic improvement, so many governments encourage it. China has a catastrophic version, but many western countries are also headed towards disaster. The middle class like tax benefits from mortgages, as a means of saving. At the same time, it moderates people's behaviour towards being establishment pawns. Few people will want to rock the boat if their savings are invested in a house, because any change in the community will potentially lose them money, and attract anger from other house owners. Scandi also explained that the bureaucrat class uses houses as investment units, and China is king in not giving a fuck / cashing in on the problems.

China rigs its economy and construction industry so badly, that any correlation between supply and demand is gone. Appearances are all that matters, and facts are suppressed from influencing prices. New construction is infested with roaches in no time, falls apart within a year, has lousy wiring and plumbing, is nowhere near facilities/amenities, has almost no occupancy, is constructed with unhealthy hazardous chemicals, can't maintain reliable utilities, etc. And the price still goes up because it can't be allowed to go down.

Visco8:

Totally agree with you!

May I add a couple of points, the Chinese are not buying houses here i.e. not getting land with the deal, as you would in Aust. e.g

.Also, the Govt can reclaim their property if need be after 70 yrs., so in fact they are leasing, not 'buying'.

A further point, in simple economic term of supply/demand, why are there so many apartment buidings built all over China, but the price is still so high?Doesn't make sense really, & CCP is reaping the benefit for now...but the bubble will have to burst!

6 years 27 weeks ago
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expatlife26:

I think you're 100% right that social stability in any society is tied to house ownership. Same as starting a family. Once you have a house and a kid you instantly become WAY more risk-averse and compliant. And i'm not saying that's a totally bad thing either it's just the way people are.

 

 

It's why young single men can be the downfall of any society. Reckless people with nothing to lose demanding change or acting out. Best to have policies to get us vested in stability. 20 YO with nothing to lose is ready to go and riot over unfair labor policies. 28 YO will take the wages given cause first and foremost he's gotte make sure his kid has food on the table you know?

6 years 27 weeks ago
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RiriRiri:

Not sure I agree.

I've become much, much less tolerant to a lot of bullshit and also much stricter on principles since my daughter was born.

I was much nicer and more flexible when I was 20.

 

People will stuff to lose will defend their stakes. Others can just move on and be someone else somewhere else.

6 years 27 weeks ago
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6 years 27 weeks ago
 
Posts: 46

Governor

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The big best fear strategy in real estate. "If you don't buy it today for this price,tomorrow the price will be even higher." so at last you have to buy house someday so why not now?"

1. Because of 70 years lease many people still living in old houses would be afraid of getting kicked out in near future so they have to buy new house to have a place to live when the time comes.

2.Most of empty houses would be purchased as the a big part of people's house lease will expire around 2020.

3.Either you rent and pay to house owner or buy and pay to bank,so they will go with bank.

4.When people have savings on hand,they want to invest it,and being most safe investment yet,they go for new house.

5.housing prices will keep rising for further few years then it will fall or just stop rising any more at that point.

6.Buying house is kind of fashion trend in china,My in-laws have 2 houses in two different cities.

 

China's overall economy growth will keep declining as less and less money flow in market as more going to real estate.and people being tied with bank loans will have less money to spend for other expenses,which will affect other business with lower domestic sell,export is also decreasing because of rising labor expense.Manufacturing and FDI already leaving the country there will be big loss of jobs and not rise in salary as it it already not rising for last 2-3 years as expected earlier.

Government will invest in big projects and will not control new construction as it accounts around 8% of china's  GDP and gives jobs to lot of people.

 

I personally not buying home in china,as i want to own a property not to lease.

And when i have to choose between lease and rent,i go for rent as i will still have freedom to move and not being stuck with one place.I can own property as free hold in my country back home so i buy there.

 

 

I still see china growing stronger economy till 2022,after that fall starts. house prices will keep rising at least till 2020 if not long.

These are just my personal opinion,which are open to healthy counter points.

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6 years 27 weeks ago
 
Posts: 212

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House prices are falling where I live. A lot of my friends who owned construction businesses are no longer making apartment blocks and instead have invested their money elsewhere.

 

But then again I live in a small City...

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6 years 27 weeks ago
 
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It's China. Them not rising would, you know, MAKE SENSE. Can't have that in good ole' MK.

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6 years 27 weeks ago
 
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https://finance.yahoo.com/news/analysis-chinas-property-crackdown-stalks-090401886.html

 

Let the carnage begin, may the best man or woman win. Shorting real estate stocks is going to get ugly in a hurry. The bubble is finally going to get it's day in the sun.

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1 year 5 weeks ago
 
Posts: 19567

Emperor

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Fire tears through Chinese skyscraper as debris falls onto streets below (VIDEO)

Fire tears through Chinese skyscraper as debris falls onto streets below (VIDEO)

More than 30 fire trucks have been called to a blaze at a high-rise building in the Chinese city of Dalian, Liaoning. No causalities have been reported, although footage appears to show the inferno engulfing the residential bloc.

Aug 27, 2021 13:37

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1 year 4 weeks ago
 
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