China’s Real Estate
For young Chinese owning your home is part of the “Chinese Dream.” The traditional view is that the house you live in ought to be your own. If you rent a house – no matter how lovely it is – it still belongs to someone else. In particular, young couples planning to wed really should be having a new home.
It is this tradition that has always made rising home prices a social issue in China. In the major cities, most young people are forced to use money from their parents to make a down payment on a mortgage loan, and then work hard and live frugally to repay the loan. The down payment is usually 30% of the total price, and the monthly installment payment usually represents 30-40% of their wages. It is quite common in China for this commitment to almost entirely take over one’s life.
Combine that with corruption, the increasingly tough time new graduates are having getting employment, forced relocations, and other issues, and the Chinese government unsurprisingly recognizes the political sensitivity of real estate.