Hot Real Estate in China
3 min readHot Real Estate
The Chinese real estate industry started in the mid-1980s.Its enormous growth potential has engaged the attention of academic and economic circles as well as the business world.Government officials and scholars can often be seen discussing anddebating with real estate developers and buyers whether any“bubbles”exist in the industry.
Chinese real estate has remained，in general，a seller’s market with a steadily rising demand.Its main customer base consists of potential buyers of apartments.
Prices of commodity housing have maintained a steady upward trend，and made a sharp climb in more recent years.Between January and November of 2005 the average price of apartments under construction or planning in Beijing was RMB 6776 per squaremeter，an increase of RMB 1183 over the same period in 2004.Meanwhile，investment in real estate has increased，to the extent that in 2005 it made up more than half of China’s total social investment.
Real estate has links to more than 50 other industries，including construction，building materials，metallurgy，textiles，household electric appliances，furniture and house remodeling.Real estate investment in developing countries at least doubles the development of relevant industries，according to a World Bank report.
The Chinese real estate industry，however，has a few snags to resolve before it can maintain healthy growth.They are:over-heated growth and investment；over pricing；and conspicuous structural contradictions.The latter is reflected in excessive non-residential buildings and ultra-large apartments and the dearth of sma1l apartments and affordable apartment buildings.
Historical Housing
Following improvements to living conditions，attitudes in urban China to accommodation and home lifestyle have changed dramatically.
Beijing’s housing culture can be traced back to the Song（960-1279）and Yuan（1279-1368）dynasties.Siheyuan（a compound of buildings around a square courtyard）date back to the 12th century，and reached their zenith during the Ming（1368-1644）and Qing（1644-1911）dynasties.After the founding of the People’s Republic of China in 1949，uniformly designed apartment blocks were built in order to meet the increased demand for housing.At that time，accommodation was regarded as a stateawarded benefit，but without any right of choice.
Work-allocated housing was an accepted form in the early years of New China.AsQian recalls，“Most people in the community knew one another.When taking a walk after supper，you would bump into various neighbors and stop to chat with each one.There was practically no privacy；all household matters were common knowledge among neighbors and colleagues.”After living in work-allocated accommodation for a decade，Qian Yuchen quit his job and went to work for a Sino-foreign joint venture company.One of his motivations for changing his job was the higher salary that would enable him to buy a better apartment.Says Qian，“An income of 40 000 yuan ayear is adequate only for a mediocre house in the remote outskirts of town，where transport is inconvenient and there are problems regarding children’s schooling and elderly health care.”
Rapid economic development and growing demand for commodity houses ushered developers into the housing market.They，along with government officials，have since explored ways of meeting housing needs based on levels of consumption.To most urbanites，buying a house is the means to a comfortable life，rather than a solution to basic needs.
