From the LA Times:
China's housing boom has created a woefully frustrated class of bachelors.
Home prices in major cities including Beijing and Shanghai have easily doubled over the last year as families and investors rush to grab a piece of the Chinese dream. A typical 1,000-square-foot, two-bedroom, one-bath apartment in the capital now costs about $274,000. That's 22 times the average annual income of a Beijing resident.
Unlike in the United States, where home buying traditionally takes place after marriage, owning a place in China has recently become a prerequisite for tying the knot. Experts said securing an apartment in this market signals that a man is successful, family-oriented and able to weather challenging financial circumstances. Put succinctly, homeownership has become the ultimate symbol of virility in today's China.
"A man is not a man if he doesn't own a house," said Chen Xiaomin, director of the Women's Studies Center at the Shanghai University of Political Science and Law. "Marriage is becoming more and more materialistic. This is a huge change in Chinese society. No matter how confident a woman is, she will lose face if her boyfriend or husband doesn't have a house."
... "People's values have changed," he said. "It doesn't matter if you're a nice guy or you're fun or good natured or have a sense of humor. They don't care. All they care about is a house."
I don't know, but, somehow, I suspect marriage has always been a little materialistic in China.
By the way, housing prices have been inching upwards for about a year in Southern California, and they were still way too high a year ago in most of California for locals to afford them. I wonder if the Chinese housing boom is spilling over into California? It apparently is spilling into Australia, so why not California?
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33 comments:
ha, the picky Chinese chicks are not because of home prices. They are picky because they are in short supply. Years of killing the little girl baby have taken care of that.
China also doesn't have property taxes. Many rich Chinese have invested in 2nd, 3rd, 4th, you name it properties which they have sit empty (who wants the wear and tear from renters) hoping to flip when they need the money. This is because the interest rates in China are well below inflation and the stock market tanked and barely recovered since before the Olympics.
The problem is while there is a vast abundance of high-end apartments, the kind wealthy Chinese would want to invest in, there is a vast shortage of cheap entry level apartments, the kind young families starting out could afford. There's just no margin in the latter for builders and bureaucrats.
Yeah, this is going to end badly. Unlike the US today, but like the US in the 30's Chinese people have vast amounts of their personal wealth tied up in real estate since down payments are often required to be 50% or better. When the bottom falls out of Chinese real estate, it is going to hurt. When the bottom fell out of US real estate in the last few years it was largely banks, pension plans, and eventually the US govt holding the bag; not the sub-prime individuals that put down 3-5% on a negatively amortizing option ARM.
Supply and demand. Demand for wives immensely outstrips supply. I would also guess that among the more affluent urban classes, the one child policy has lead to many young girls growing up with a high standard of living, which results in high expectations when they reach the age of marriage.
Whiskey bait if I ever saw it!
"No matter how confident a woman is, she will lose face if her boyfriend or husband doesn't have a house."
By house, she means a cramped three room flat in a walk up or high rise in a city where you can cut the air with a knife.
I got hit up for $20K by my Chinese in-laws to help purchase a condo for a sad sack 20-something nephew who had never dated in his life, had no opportunity for higher education (Chinese universities award college admission strictly according to performance on g-loaded entrance exams), but had the prospect of being matched with the daughter of my sister-in-law's best friend.
Once ensconced in their new shoe box condo in a satellite city of Beijing, the newlyweds produced a daughter (somehow), then went back to playing video games in separate rooms when they weren't working at their easy government jobs. The mothers-in-law show up daily to do all the house cleaning and child care.
Call me crazy but I think a lot of China's frenetic growth is the result of striving by a generation raised under the dismal conditions of the Cultural Revolution. But the follow on generation seems unimpressive.
Didn't we talk about the reason Southern Cal housing is inching up a while back? Maybe it was another blog.
Various spots of California are becoming Asian cocoons. Fremont, which used to be a farming community and then a bedroom community, is now the fourth largest city in the Bay Area, and the growth is almost entirely Asian. Koreans in particular come here and not necessarily to work. Some just send their wives and kids over to take advantage of the free schools.
That could definitely result in some artificial inflation of housing prices.
Seem not having a wife would be a lot cheaper.
"Supply and demand. Demand for wives immensely outstrips supply. I would also guess that among the more affluent urban classes, the one child policy has lead to many young girls growing up with a high standard of living, which results in high expectations when they reach the age of marriage."
Which is why Chinese men are going to Vietnam and Laos looking for brides. Most of the peasants will sell their daughter for a portable TV or a 6 month supply of Raman noodles.
Yep, its estimated that currently 20 million Chinese guys will not find wives, which will rise to 50 million by 2020!
So, lots of stability there. I like Mark Steyn doubt they'll become the first gay superpower since Sparta.
Jim Chanos is famously shorting China, as AllanF noted, lots of speculation in the housing market, both residential and commercial. There is an office for every Chinese person in China, apparently. Chinese authorities are desperate to keep the boom up, but it will come a cropper eventually. These things always do.
The sex imbalance of course is made worse by "Red Princes" hoarding women. Some high officials or sons of them have as many as 100 mistresses -- that's Tiger Woods territory. Unsurprising given the huge wealth disparity in China.
At least one country in the world will not suffer from the dysgenic effect of the modern societies. At least during this transitional period.
Whiskey, sources please.
Marriage among the Chinese=materialistic?Chinese women dont care if you're a nice guy--they want a house? This could be traumatizing to some readers here!
Maybe the lack of marriageable women in China is fueling the exodus to Africa:
http://www.nytimes.com/2007/08/18/world/africa/18malawi.html?_r=1&pagewanted=print
Mr. You’s partner here, Mei Haijun, first came to Ethiopia a decade ago to work at a Chinese-built textile factory and has since married an Ethiopian woman, with whom he has a child. “When I first came here you could go two months without seeing another Chinese person,” he said. “But it is a different era now. There’s a flight to China every day.”
The sex ratio problem should be self correcting. In the traditional Chinese rural family the new wife goes to live with her husband and his parents. The mother in law maintains her household authority which makes the young wife a sort of servant. The young wife works for the family of the husband.
This means that at birth the rural Chinese family is presented with two prospects depending on the sex of the child. If it's a boy they will soon have a young woman to add her labor and care for the aging parents. If however it's a girl they will have to support her throughout her childhood and just when she becomes productive she will go benefit some other family.
It's not oriental prejudice against women or some side effect of communism, it's simple economics. Girl babies are bad investments for poor rural families.
But things are changing in China. As China becomes richer and young couples establish their own households women will gain value. The Chinese don't enjoy killing their baby girls anymore than starving peasants everywhere have enjoyed selling their girls into prostitution. Poverty makes for tough choices.
Albertosaurus
"Various spots of California are becoming Asian cocoons."
I'm definitely keeping an eye on the situation. I want to make sure I sell my middle class Bay Area house while there are still gullible Chinese immigrants willing to pay five times the median home price for it. As soon as the Asian demographic tsunami crests, I'm calling ReMax.
Truther: Jim Chanos himself Speaking. Fascinating.
I stand corrected, the Sky News report Here predicts 24 million men by 2020, the BBC reports the same, United Families International had the 30 million number. The Mark Steyn post I was thinking of had the following, i.e. "only" 24 million. So my bad, it will be "only" 24 million, not 50 million by ten years time.
The growth of the abduction of women to be raised as sex-slaves/wives is a major concern in China, the report Steyn cites notes.
Listen to Chanos's talk. It is impressive.
Here is a bit from Chanos on Charlie Rose link here. Short take -- he believes the Renmenbi will be inflated into collapse, as the Chinese try to cover their housing market losses.
He's betting the raw material suppliers: guys I assume like BHP Billiton, Rio Tinto, and the like will collapse. Chanos had a NYT interview Here.
Let me add, the Al Jazeera (English) report on the empty city of Ordos, is fascinating. Yes, I know Al Jazeera. But ...
I love the money quote "No one has ever lost money in real estate in China" ... so an entire city stands empty.
See the video. The city is basically empty.
I know the gender ratio is highly skewed in rural areas. Just skewed at the town level. And not skewed at all in the larger, richer cities.
Will this have an eugenic effect?
Its already well known in Australia that in many suburbs, you don't even bother looking at houses or apartments that include the No.8 - the Chinese lucky number - because there'll be too much demand.
I've always thought that one way to get college age lefties to support immigration restriction is to drive home the message to them that immigrant-fuelled demand for houses/apartments is what is pushing up the prices and thereby forcing them to work longer and longer to obtain the most traditional form of financial stability.
In China, the fertility rate in the urban areas has dropped well below 1. Peasants continue to have moderate sized families, but the educated classes are not breeding much these days. I don't know how significant the variation in IQ and human capital is across China, but the trend isn't too good.
By the way, the split between the affluent urban classes and the impoverished rural and migrant worker masses is nothing new. China's social structre has always been characterized by this type of stark class divide. The imperial governments also tended to restrict entry into the urban areas, in order to keep out the peasantry.
There has also been a divide between the highly dynamic, wealthy, and literate southeasthern coast (Fujian, coastal Guangdong, Meizhou, Zhejiang) and the rest of the country. The southeasterners dominated international trade, quite a bit of the internal commerce (even north of the Yellow River), and tended to win well in excess of half of the imperial exam seats.
"A typical 1,000-square-foot, two-bedroom, one-bath apartment in the capital now costs about $274,000."
Isn't 1,000 sf pretty big for East Asian urban areas? Don't middle class Japanese families of 3 or 4 tend to squeeze into 600 sf?
As soon as the Asian demographic tsunami crests, I'm calling ReMax.
Imagine having fought in the Korean War against a 'tsunami' of Chinese soldiers, being put in suspended animation after returning home, then being awakened today and shown what is going on with Asian immigration in California.
With hardly a thought, America is handing over one of its real jewels -- California -- to people who are about as foreign as it is possible to be.
It's sickening.
Nothing against them as individuals, mind you. I'd hope they would all lead happy and prosperous lives. Back in China. Or wherever.
>Don't middle class Japanese families of 3 or 4 tend to squeeze into 600 sf<
Denso employees serving a term in America have regular-sized American houses. And their children approximate the girth of white American children.
Chinese have a problem with land speculation in cities. This has been the case for a long time, and I actually suspected some Chinese influence on our housing boom here in the US last decade (living on the West Coast I saw a lot of Chinese engaged in land speculation). I also distinctly remember the atmosphere prior to the HK handover, when real-estate speculation drove the price of HK houses through the roof. I couldn't believe it at the time, because it seemed obvious to me that HK would see harder times after the handover, but there was still an impressive bubble which, naturally, promptly popped in the Asian economic crisis of '97.
So I doubt the housing bubble in China has much to do with securing wives -- the women just follow the trend and start demanding whatever the "it" thing is. I'm sure you need a car in Chinese cities to have a good-looking girl, too.
Another issue is that China's five year plan-based economy pretty much ensures that they'll predictably follow global patterns, only they'll be a few years behind the curve. So perhaps we'll see a very similar trajectory in the Chinese housing market on a delayed schedule. I expect something like this.
Call me crazy but I think a lot of China's frenetic growth is the result of striving by a generation raised under the dismal conditions of the Cultural Revolution. But the follow on generation seems unimpressive.
The next generation of Chinese will be lazier and spoiled, but to make up for it they'll be more intelligent. In the mid 1990s the government embarked on a campaign of iodine fortification in salt, resulting in a gain of 5+ IQ points in school children.
http://www.chinadaily.com.cn/china/2006-05/17/content_592904.htm
Steve, might be that Beijing is a lot like your typical Blue State. There's always another "ring road" to build and fill in, ie. plenty of space.
Plus, as the new construction is being bought by wealthy speculators as an "investment", they favor a large, western-style apartment for their speculation.
Because Chinese kids study in Australia in large numbers and Australia is very well set up to accommodate foreign students. It is a major economic driver in major Australian cities. Parents buy houses there while the kids study.
Australia is also surrounded by Asia.
Australia is also expanding lending dramatically at the same time as the US has been contracting.
But you know, you could be right, the fact that something is happening ten thousand miles away means it must be happening here too...
One other thing. Don't think of it as $257 large. Think of it as a multiple of the median income. Makes LA in 2007 look like the standard of sobriety.
I'm surprised to hear that there is a housing bubble in China because I thought all the Chinese people were in Vancouver BC buying up houses and driving up prices.
Only the one who can secure a home can reproduce. The ones must be in top percentile of IQ if wealth is correlated to IQ. Wow, Chinese women seems never stop raising national IQ.
"Call me crazy but I think a lot of China's frenetic growth is the result of striving by a generation raised under the dismal conditions of the Cultural Revolution. But the follow on generation seems unimpressive."
--I've had a chance to look at the generational differences of a large family in Hong Kong. The older generation, now in their sixties, grew up poor, didn't go to college, and has prospered in business. The younger generation, now in their thirties, has had all the material advantages, many of them have studied abroad, they all speak English fluently, and they are singularly unimpressive. One reason for this is that all of the good spots have already been taken, all the opportunities spoken for, thirty years ago. Another is that Chinese culture is essentially incompatible with modern individualism. To get that, the younger people have had to look to the West. And what do we give them? Rap, Hollywood, Oprah... not exactly the culture of achievement! As someone has said, we may be handing California over to them, but we're also handing over our cultural diseases. I give China another 10-20 years, then it will drop faster than Japan.
Write more on China, Steve. And come and visit Asia! I am sure you have readers everywhere here who can show you around.
"I'm surprised to hear that there is a housing bubble in China because I thought all the Chinese people were in Vancouver BC buying up houses and driving up prices."
I'm afraid what you say is all true. Chinese buyers dominate the high end of the market and Vancouver and Toronto are still known as the best city in Canada for Asians to emigrate to. That is not the first time that house prices in Vancover have been driven up by immigrants, especially Chinese.
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