What The Average Zhou Thinks Of China’s Housing Bubble: "Only After War Breaks Out, We’ll Be Able To Afford It"
By Tyler Durden
Chinese home prices are soaring. In fact, according to the latest data, the bubble among China's top, or “Tier 1” cities has never been bigger entirely at the expense of all other cities.
And while this appears at first glance a positive, for central-planners and leveraged speculators, we wondered what the man on the street of Beijing thought of it.
Policies by Chinese authorities to stimulate the country’s housing market have contributed to sky-high prices in some big cities such as Beijing, Shanghai and Shenzhen – with developers and real estate agents adding to the craze. What do Beijing residents make of the current market? Do they fear that a property bubble might be on the horizon?
The Wall Street Journal hit the streets to find out, and discovered the average Zhou is not happy…
Hu Xiaolin, 56, retired worker from Beijing
Do you currently own a house? If not, do you plan to buy one in the future?
No, I don't own a house. I don't plan to buy one; I can't afford it. My parents had a house, but my brother and sister live in it now. I just saw the news today about a “school district house:” an 11-square-meter bungalow was sold at 460,000 yuan ($71,000) per square meter. In total it's 5 million yuan ($770,000). It's just a game for the rich!
Why do you think real estate prices are so high? Do you expect them to decline or keep rising?
A few years ago the high prices were due to real demand. Gradually there was speculation, and now even regular people know that real estate is more valuable than stocks; the value just keeps rising. A house originally worth 4-500,000 yuan ($62-$77,000) might now be worth 2-3 million yuan ($300-$460,000). You can survey how many houses have owners living in them by counting the lights at night. Why so many empty houses? They belong to the real estate speculators, the hoarders and the corrupt officials.
Have you ever used a housing agent in Beijing? What was your experience like?
Yes. They're unreliable. Most talk rubbish, especially those working for small agencies. They always go back on their word and the staff are low quality; all they think about is selling houses and drawing a commission.
With “destocking” one of this year’s economic targets, what kind of change do you hope to see? What is the role of the housing market in China’s economy, in your opinion?
I hope the bubble can be eliminated more or less. What worries me is that if there are no purchasing requirements for outsiders and the rich flood into Beijing, the pressure will be overwhelming. The home-purchase policy isn't implemented strictly. Beijing isn't a livable city at all.
Liu Na, 32, garment trader from Shandong
“Chinese people want a house after they get money. It’s a fixed asset and can …read more
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