Comment by whatever1
1 day ago
The cost of housing in the large Chinese megacities is comparable to, if not higher than, that in Western countries. Therefore, they are not constructing housing at a fast enough pace to meet their population’s needs. However, they do build at a rate that is 2-4 times faster than that of Western countries.
> they are not constructing housing at a fast enough pace to meet their population’s needs
It's more accurate to say PRC/CCP understood it's _impossible_ to build enough housing in Tier1 cities where everyone wants to be, the supply/demand curve will never make sense outside of micro/small countries where everyone can fit in a handful of cities. Can't fit 1 billion people in Beijing/Shanghai/Guahzhou/Shenzhen etc, need 30/40/50 cities that are almost as enticing.
What PRC is constructing "fast enough" pace are entirely new cities / developing shitholes into T2/T3 alternatives to shift demand away from T1/T2s. IMO that's the real lesson west needs to learn but can't due to lack of hukou / internal migration controls - spreading out desirable urban areas because talent / productive centres tends to agglomerate ala zipf's law, which Chinese development patterns does not follow. IIRC 10-15 years ago, there were ongoing academic debate about PRC's urban density (or lack of due due to sunlight planning laws), and how PRC could be more competitive if it doubled density in T1 cities, but central gov said no, better build more desirable, low CoL cities (especially inland / poorer regions) where _most_ of population can distribute vs hammer T1 further into unsustainability.
Chinese housing demand is a unique beast.
Chinese citizens do not see stocks as a stable investment, so housing becomes the main type of investment. Housing domicile rules (Hukou system) give special rights to homeowners which incentivizes housing purchase instead of renting.
As a result, housing prices are proportionally higher in China than in the US. There is a gold-like intangibility to it.
If China also had NIMBYs alongside this system, their houses would've easily risen to the most expensive in the world.
The prices depend on the city, apartments in Chongqing cost around $1,000 USD per m², about 1/5th of the prices in cities like Beijing and Shanghai.
What does ‘comparable’ mean? Is it about ratios between incomes and costs? Or cost of the same apartment in two places? Or something else?
Cost/income is a good ratio. The megacities (Shanghai, Shenzhen etc.) probably have a ratio similar to New York.
Just from top of my head as I left Shanghai 10 years ago, a typical condo in Shanghai could cost over 5 million yuan (urban but definitely not core city), while a salary of 300k pre-tax is considered as a good salary.
On the other side, housing is affordable for locals -- locals usually got very generous compensation from the demolition of their original home.
Median monthly cost in terms of median take home pay would be the sensible comparison.
This would exclude ex-pats.
Chinese housing is a unique situation. Because the government owns everything the chinese stock market kind of sucks. Without equities to invest in the chinese look for alternate investments. Real estate became the main instrument. China has the issue that you'll here leftists in the US claim exists, too many units being kept vacant by investors.