Thinking of buying a house in China? It's a trap!
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By Liu Rui |
I was sitting at home enjoying a nice cup of coffee when my mother-in-law asked the same question that I hear all too often, "When are you going to buy a house in China?"
It's considered normal to own a property in China before you get married, so not owning one tends to raise a few eyebrows.
I've never understood this mad desire to buy a house in China at the moment when all the signs are shouting "don't."
It's rare to find anyone who won't acknowledge that China's real estate is in the middle of the biggest property bubble ever created, but this doesn't stop them recommending buying a property.
The reason given is invariably that the government won't allow the bubble to burst, but that tends to imply that governments always get their policies right.
That argument also doesn't take into account the huge majority of people who don't own houses, the government might be more inclined to appease that much larger group, forcing prices lower.
With the average salary for a recent graduate in Beijing currently around 2,500 yuan ($375.50) a month, buying a one-bed flat in Dongzhimen for around 2,000,000 yuan ($300,000) is a pipedream even with their parents providing the 30 percent deposit and that price is a long way from the top of the market. What they can afford is one of the many tiny studio flats costing 600,000 yuan ($90,120) that are littered around Beijing.
Add in the interest payments on the mortgage and it hardly seems worth it to me. Especially as rents are incredibly low by comparison.
Property might be seen as a sound investment but as private ownership of property has only been around for a short time in China, there really is no proof that this will be the case.
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