This is the reality of China's boom. After decades of explosive growth, the cost of living in China's big citieshas skyrocketed, and many young people have been priced out of the housing market.
People in the West tend to think the Chinese are taking over the world; the reality isyoung people here struggle to make ends meet. Putting food on the table and having a shelterare still their biggest concerns. I'm 27, with a graduate degree in journalism and a good job in my field,and I'm worried about these basics.
No Home, No Honey
Owning a home is even more important in China than in America. Homeownership is the main prerequisite for single men looking for wives — property becoming a unifying force that binds two families together.
“A rough calculation reveals that every month after paying the mortgage and for food and other essentials, I will have a little more than $100 left. A crowded bus ride to the office now takes nearly two hours.
Mothers-in-law want their daughters to have an easy life, making single male homeowners the preferred choice of a mate. But that's not enough. In-laws demand tha thomeownership certificates include their daughters' names— an insurance policy that entitles the wife to half the value of a property if a couple divorces.
A growing income gap and rampant materialism have driven many young women to openly focus on finding rich husbands. Some who do agree to marry poorer guys are reluctant to share the burden of paying off debts.
Businesslike as it may sound, the family negotiations before marriage are to a great extent like preparations for a business transaction. This is true of many Chinese families, mine included.
This age-old practice is suffocating many young men in China. Buying property is the talk of the nation, just as it was in the U.S. before the bubble burst a number of years ago. Except it is much harder here. Statistics show on average it takes families in Shanghai 28 years to pay off an apartment, in a city where prices compare with big American cities but incomes are far lower.
Not A Supply Problem
After seeing a lot of real estate during my three months of house hunting, it seems to me that the high prices aren't a result of demand outstripping supply but the result of a policy failure. Block after block of apartments in suburban Shanghai sits empty. It's more obvious at night, when few lights in those buildings are on.
Apartments in Shanghai cost as much as they do in major American cities — but incomes are much lower.
The popular Chinese magazine Caijing recently reported that a survey done by the Beijing police last year indicated that of the 12.3 million apartments in the city, 3.8 million were vacant. That's a vacancy rate of 29 percent.
With limited investment options, companies and the rich have poured money into the real estate market. They are willing to let property sit empty so it can fetch a good price — in the belief that incomes and demand will eventually catch up.
A commentary in the People's Daily, the Communist Party's main newspaper, recently asked why so many young people suddenly feel so old. A subsequent survey by Beijing News showed 86 percent of respondents cite high housing prices as the major source of pressure in their lives. This frustration is widely shared. I've started losing sleep since I began house hunting.
What A "Bargain"
To find a cheaper home, I focused on the areas at the end of each subway line. The search for a good price pushed me so far out, I came within a few miles of the next province. After months of painstaking online searches and visits, I settled on an 860-square-foot, two-bedroom apartment that costs $208,000. That price tag is so big that it felt like a boulder on my shoulder. However, in the current market, this price really seems like a bargain.
The apartment was built six years ago; colorful fliers from small businesses cover the walls of the building's hallways. It's just the skeleton of a living space, really; rooms with walls and uneven bare concrete floor and not much else — no appliances, no wooden flooring or carpeting, no usable toilet even.
'Lightning Divorces' Strike China's 'Me Generation'
To modestly outfit the place will require an additional $40,000. A rough calculation reveals that every month after paying the mortgage and for food and other essentials, I will have a little more than $100 left. A crowded bus ride to the office now takes nearly two hours.
A friend of mine, who moved to Australia and now works in a factory making springs for pacemakers and hearing aids near Sydney, owns a house, a brand new Toyota SUV and has three kids. Our monthly income is almost the same. He drives 20 minutes to his workplace. Life in Australia seems much easier, although he does complain he has no savings.
Things should get better. Thanks to Shanghai's fast-expanding infrastructure, a new subway line is expected to open by the end of this year. That would very likely cut my commuting time to 70 minutes.
My father comes from a poor farming village in western China. It has taken a few generations for my family to have a member able to live and work in what is arguably China's premier megacity. To give my children a leg up, I plan to stay.
Zhuo Yang works in NPR's Shanghai bureau.
ychick • 2 days ago
The writer says that it will take up to 27 years to pay off the apartment. Well, in the USA a 30 year mortgage is standard, so I don't see what's so shocking about that. Also, many people, especially if they buy a property in their 20's, don't have money left to save or spend for fun things after paying their mortgage, food, cable, car payment, etc... This just sounds like life in the capitalistic system. Welcome to our world.
Rodney Burton ychick • 2 days ago
He says it will take him 12 years to pay off if he spends 100% of his salary on the home; his age is 27. That 12 doesn't include the 40K to add a toilet and floors.
240K over 14 years and he makes 17K a year. If he uses the rule of thumb of spending 25% of your salary on your mortgage, and the mortgage only accumulates a meagre 3% interest, the interest is still higher than what he pays.
SO, if he pages half of all he makes on the mortgage, it will take over 65 years (again assuming only a 3% rate).
Brandon Elliott ychick • 2 days ago
at least here there is the option to not do that. This guy is getting a bare bones lifestyle after a huge expenditure.
Mark Kropf ychick • 2 days ago
The biggest difference is that renting is not seen as culturally acceptable for single men. If the mores of Chinese society are not to be forced to change- and I for one would not see it as my function to dictate values to others abroad-single men in China are at a substantial disadvantage to those here. Unless they have been 'well healed' they are bound to live in virtual penury with wives, if they can even afford to marry.
The Chinese government may find that such social expectations need to be 'adjusted' or the supply of apartments needs to be increased dramatically to drop costs and increase access.
In the latter case, the Government may need to address Chinese mortgage holders who have been made to be in a situation analogous to those here who find themselves 'under water'.
China has a problem here that is not going to go away, is rather likely to only get worse and which may lead to greater discontent with the governance of the country.
Rodney Burton ychick • a day ago
Also what many people here seem to be forgetting when they say "sounds like the USA!" is that here we enter into large mortgages like that for great apartments with good amenities inside good cities (not NY city proper, but good), or we enter into mortgages like that for good houses in middle-class suburbs/small towns.
In the USA we do NOT enter into life-crippling mortgage for a smallish apartment in an unfinished building with concrete floors, no toilet, and a two-hour commute from the city center!
This whole Chinese real estate bubble sounds to me like the inevitable result of the current generation of Chinese leaders having been raised in a China where any predictions of their future that weren't flamboyantly glorious led to imprisonment or death. Communism shrivels and crumbles in the harsh light of reality.
colt call ychick • 2 days ago
There's something I love about the mystery of China. People in big cities live in closet sized apartments....while there are entire ghost cities in China. And now China is not only building these entire uninhabited cities around China....they are building entire uninhabited ghost cities in Africa. Wow. What gives with that?
Why is China constructing large, well-designed “ghost cities” that are completely devoid of people?
Now, the BBC reports a giant new Chinese-built city has been spotted in Africa in the outskirts of Angola’s capital Luanda.
Fan Yang colt call • 2 days ago
people don't go where flats are, but where jobs are.
dan strayer colt call • 2 days ago
The answer to your question is that the money invested in these ghost cities appears to make their GDP look larger that it really is, by many billions. Just another form of fraud.
ychick • 2 days ago
You missed the big (BIG) one in your listening and/or reading: He says it will take 27 years at 100% of his salary. In the US you typically get a 30 year mortgage from a reputable bank if your monthly mortgage payment equals to about 30% of your monthly expenses.
Rachel M Walls Guest • 2 days ago
That was 12 years at 100% of his salary... 27 years with having only $100 left on a monthly basis after all bills/expenditures accounted for.
Trena Gravem • 2 days ago
The love of money is ruining lives and causing human misery everywhere.
Trena Graven......Send your money to me so that you can live more happily in poverty? Yeah, that's the ticket. Send your money to me.Trena Graven……
Trena Gravem colt call • 2 days ago
Hi Colt, you didn't notice, I said the LOVE OF money IS ruining lives and causing human misery everywhere. Money is a necessary evil. But, many people put their faith in it, they depend utterly upon it, it is their top priority to accumulate as much as possible of it, and this takes precedence over their love of life. It DEFINES their pursuit of happiness. Money cannot buy lasting, inner happiness of the sort which serves any purpose for either the person with the money, or for anyone else.嗨, Colt, 你没有
DH • 2 days ago
I wonder how their economy will handle ahousing collapse. Greed will destroy just like it does here.
DScully DH • 2 days ago
You need to actually be wondering how oureconomy will handle their collapse. That's the bigger issue.
TheSanity Inspector • 2 days ago
People in the West tend to think theChinese are taking over the world; the reality is young people here struggle tomake ends meet.
With a population of more than a billion,can't both be true?
RodneyBurton TheSanity Inspector • a day ago
"one single unemployed man is anannoyance; 100 million are a war." -Orson Scott Card
mysterymeat TMur • 2 days ago
i think that somehow sitting on the emptyreal estate must be cost neutral..
lostisland • 2 days ago
Hey, that sounds like Honoluluor New York.
IsaacBresnick • 2 days ago
There's no need to live in the center of Shanghai, anyways. Pricesare much more reasonable for apartments the further out you get. Furthermore,$100/mo. goes quite a bit farther than it would in the United States.
mysterymeat IsaacBresnick • 2 days ago
ut he says that he hunted in the suburbs,and purchased a unit that's a 2 hour commute to his job
IsaacBresnick mysterymeat • 2 days ago
Having recently spent an hour and fifteenminutes in a taxi trying to get from my hotel to Hongqiao airportat noon on a Friday, which Google Maps estimated to be a half hourdrive, I'm not that impressed by a 2 hour commute. You're still well within Shanghai. Compare that tofactory workers in Changzhou,which is about a two hour drive outside of the city, and I bet thehousing prices are far more reasonable.
mysterymeat IsaacBresnick • 2 days ago
are there jobs for journalists there? andreally, an occasion cab ride to the airport can't reasonably be compared to 4hours a day on a train.
i'm not necessarily disagreeing with you,obviously you have real life experience that i don't... but in reading yourcomments in this thread, i can't help wondering if you've taken everything intoconsideration. maybe your wife's employer is getting a "deal" on theapartment you're living in, for example. i once lived in a condo in downtown chicago that my employerrented well under market value because the building was owned by a sistercompany. i can't know, but i suspect there are a lot of "specialarrangements" made within the wealthy business class.
China isweird that it has simultaneously adopted capitalist consumerism with communistmassive mismanagement of resources and assets.
MrBigStuff BrandonElliott • 2 days ago
State Capitalism is really what the countryhas adopted.
BrandonElliott mysterymeat • 2 days ago
Their government is significantly morewealthy on a personal level than ours even. It's a classic case of funnelingthe wealth of an entire country to the hands of the political elite, only on amuch grander scale than usual.