What The Average Zhou Thinks Of China's Housing Bubble: "Only After War Breaks Out, We'll Be Able To Afford It"

Chinese home prices are soaring. In fact, according to the latest data, the bubble among China's top, or "Tier 1" cities has never been bigger entirely at the expense of all other cities.



And while this appears at first glance a positive, for central-planners and leveraged speculators, we wondered what the man on the street of Beijing thought of it.

Policies by Chinese authorities to stimulate the country’s housing market have contributed to sky-high prices in some big cities such as Beijing, Shanghai and Shenzhen – with developers and real estate agents adding to the craze. What do Beijing residents make of the current market? Do they fear that a property bubble might be on the horizon?

The Wall Street Journal hit the streets to find out, and discovered the average Zhou is not happy...

Hu Xiaolin, 56, retired worker from Beijing

Do you currently own a house? If not, do you plan to buy one in the future?

No, I don't own a house. I don't plan to buy one; I can't afford it. My parents had a house, but my brother and sister live in it now. I just saw the news today about a "school district house:" an 11-square-meter bungalow was sold at 460,000 yuan ($71,000) per square meter. In total it's 5 million yuan ($770,000). It's just a game for the rich!

Why do you think real estate prices are so high? Do you expect them to decline or keep rising?

A few years ago the high prices were due to real demand. Gradually there was speculation, and now even regular people know that real estate is more valuable than stocks; the value just keeps rising. A house originally worth 4-500,000 yuan ($62-$77,000) might now be worth 2-3 million yuan ($300-$460,000). You can survey how many houses have owners living in them by counting the lights at night. Why so many empty houses? They belong to the real estate speculators, the hoarders and the corrupt officials.

Have you ever used a housing agent in Beijing? What was your experience like?

Yes. They're unreliable. Most talk rubbish, especially those working for small agencies. They always go back on their word and the staff are low quality; all they think about is selling houses and drawing a commission.

With “destocking” one of this year’s economic targets, what kind of change do you hope to see? What is the role of the housing market in China’s economy, in your opinion?

I hope the bubble can be eliminated more or less. What worries me is that if there are no purchasing requirements for outsiders and the rich flood into Beijing, the pressure will be overwhelming. The home-purchase policy isn't implemented strictly. Beijing isn't a livable city at all.

Liu Na, 32, garment trader from Shandong

"Chinese people want a house after they get money. It’s a fixed asset and can be passed to their descendants. But I have no plan or fantasy to buy one. The price makes it off-limits. It’s also a food chain: Only the richest and most capable people can live here."

Anna Zhuo, 33, ad industry worker from Heilongjiang

"I hope the prices can be stabilized. The government can release regulations on housing replacement, sparing the ownership transfer fees. The housing market is a pillar (of the economy). If it's ruined, our economy will be, too. It’s also a visible bubble. Everybody knows it will burst, but they still touch it."

Martin Lee, 34, business manager from Beijing

"Housing is the most direct way to exploit people. The prices will rise steadily and fall dramatically after they've reached a certain point."


"It's a means for the privileged and interest groups to make a profit. 1,000 years ago, the ancient poet Du Fu said, "Where can I get a big broad shelter a thousand, ten thousand spans wide, a huge roof that all the world's poor people can share with smiling faces?" Now, nothing has changed. The housing market is part of the bubble economy. In 5 years or so, after a war has broken out, then the middle class will be able to afford a home."

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And finally, there is Shi Ji, 24, housing agent from Jilin

"The Chinese housing market started in the 1990s and is still in an initial stage. It’s a backbone of the economy. The Beijing real estate industry pays tens of billions of yuan in taxes annually. Many say they can’t afford to buy a house, which is not exactly right. Most consumers are seeking to upgrade their homes. If you can’t buy a big house, buy a small one. If you can’t buy in Beijing, buy in second-tier..."

So buy, buy, buy!