Over the last week or so, the Global Post has been looking into the China real estate bubble in an interesting four-part multimedia series. Besides worrying about unsustainably rising house prices – especially in Shanghai – it also checks out hte underlying causes of the bubble and examines some of the unique social customs driving prices even higher. Highlights below:
From China’s Bubble: Living the “Shanghai Dream”:
“It is extremely rare to get such a big piece of land in downtown,” explains the manager at China Construction. “And since supply and demand determines price, the government cannot possibly control where prices are headed.”
Last year, Cai invested in a third home for RMB20,000 ($2,941) per square meter in the city’s central Xuhui district, or more than triple what he paid a decade ago.
“Every year there are more and more wealthy Chinese. What are they going to do with all their cash?” said Cai. “You can only buy property or start a company. Property is the safest way to go.”
“How can anyone on an average salary afford it when Shanghai housing goes up by 50 percent every year?” said Ni, glumly.
He says he doesn’t want to be a member of the “keng lao zhu” — a term that literally translates to “clan gnawing away at the older generation.” It means those young folks who depend on their parents to support them.
“I told my girlfriend, we could get a place — a smaller place, maybe 50 to 60 square meters, maybe in a building built in the 90s,” Ni said. “If we wanted to we could manage it, but the truth is I don’t really want to buy a house.”
The fourth part is an unfortunately unembeddable multimedia video, but it’s definitely worth a watch. Housing prices has been one of the most contentious sticking points for the populace as of late, with a majority of netizen questions to Premier Wen Jiabao right before the NPC being about how they could possibly afford the country’s real estate.