housing bubble in china, and elsewhere

“安得广厦千万间,大庇天下寒士俱欢颜”, not for the modern Chinese. The country is falling without values, but people just cannot care less.

People love owning properties and are crazy about owning costly properties such as houses. A tent, a shelter, an adobe, an apartment, a mansion, and a skyscraper…, from ancient tribes to modern societies, each of these structures provides human a shield that separates us from the outside, the hostile however natural environment. It satisfies human’s basic sense of protection and security against the unpredictable and the uncertainties. Never mind that this is an irony that unpredictability and uncertainty have been driving human development ever since human beings came to their existence in this planet.

OK. Enough for the philosophical blah blah… Let’s look at the Chinese housing saga. I had a few friends who had bought apartments at early 2000. Obviously now, these friends of mine are considered a lucky group that gained handsomely in personal finance, thanks to the Chinese housing bubble in the recently past years. We saw empty residence towers in big metropolitans such as Beijing and Shanghai. Now houses are merchandises, goods, means of investment, but not for sheltering ordinary people from the hostile surroundings. Instead, everyday people are under pressur to endure unprecedented physical, financial and mental stresses only to acquire a humble place to support their families. Young people struggle to buy houses and hand over with their parents’s hard-saved cash to the real estate developers. Personal and social values follow in a twisted manner that reflects the substantiated impact by the housing bubble. An ownership of an apartment is required by a Shanghai mom to her future son-in-law so that she can feel relieved for her daughter (for what?). The most common talks at lunch and dinner tables are about buying, selling, and pricing of houses (topic that is equivalently hot is the stock market, which is also busting a bubble this year). Housing slangs including “fang nu”, “wo ju”, “luo hun” are now part of the pop culture.

(Image Bloomberg. People who made down payments on homes at a China Vanke Co. development protest in Shanghai outside the Vanke Shanghai Center, standing opposite a row of security guards. Caption from Los Angeles Times, Dec. 13, 2011)

Years of zealous growth in housing values evangelicated people to pursue real estate ownership as nearly as a religious endeavor. Recent real estate price drop due to the Chinese government  intervention has angered many fresh buyers who believed the only way for housing price to go is up. This is an old bubble in America, but in China it is going through a whole other uncharted water. See a report from Los Angeles Times for a recent account.

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