Why do Chinese people love buying properties so much?

Last night, I had an argument with my boyfriend about whether we should buy a flat when we want to settle down. As a born-and-raised Chinese, I suggest we buy, but he suggests renting. He told me that few people buy properties when they are in their 20's in his country (he is French). While feeling frustrated about the cultural gap, I happened to read an interesting article in Chinese explaining “Why do Chinese people love buying properties”, so I made a summary for Westerners — and especially my boyfriend — to understand the reasons behind.

#1 — The concept of “home” for Chinese people

The character of home in Chinese is “家”, it is a pictograph (the picture resembles what it signifies), meaning that there is a “pig” under a “house”, Without a house, the pig will run out, there is no “home” anymore. From a Chinese traditional point of view, “home” defines the range of their daily life. It is the base to carry on the ancestral line, and also a symbol of status and wealth.

#2 — Buying the feeling of “home”

Traditional Chinese ethics create a strong family culture and cultural roots. Many places still preserve genealogy, family tree, there are also“seniority” in lots of people’s names. “Home” in Chinese people’s minds is a spiritual support and a place to rest their hearts on. Where there is a home, there is warmth, stability and happiness. For Chinese people, if they do not have a “home”, it is like duckweed without root, no sense of belonging, no direction. They feel life will lose basic sense of security and stability, and instead creates a “sense of drift” and finally become spiritually exhausted and disoriented. That’s why few Chinese people are willing to rent if they can afford to buy: living in others’ place creates a sense of exclusion and insecurity.

#3 — Getting married with a “house”

In the Chinese culture, it is common to say “成家立业”, meaning “form a family and start a career”. Without a physical home, there will be no career. This is different from many parts of the world, people need to have an actual “home” to get married. This is why people in China tend to buy the first home between 22 to 30.

According to a 2010 survey, less than 20 percent of mothers-in-law can accept the fact that their daughter marry someone without a “house”(or apartment). This “compromise” from the 20 percent mum is a result of the high property price in big cities. This gives a lot of pressure to Chinese men. In many cases, education, knowledge or ability is not the most important factors for Chinese women to choose a partner; the number one factor is whether the man has a house - the second factor is to have a car. This traditional thought is changing but is somehow rooted in many Chinese people’s mind.

#4 — “House” is the “face” of Chinese people

What is “face”? It is private pride or glory in the public space. “Pride” and “face” matter a lot for Chinese people, so that they will try to maintain it and prove their dignity in various situations. Consequently, many people do ridiculous amount of things just for their “face”. For example, a few years ago a Chinese farmer built a spacious house, soon a new neighbour built a two-storey building, then the first farmer took out all his savings together with some loans to build a three-storey building to show he has more “face”. This mentality does not decrease with the new generation. It is not uncommon to see young people under 25 years old already owning one or even several properties.

#5 — “Eating the old” to buy a house is a major feat of the Chinese property market

Unlike some Western countries and Japan, Chinese young people rely on their parents to buy their first property, because they are simply unable to afford it at such a young age. According to the Housing Guarantee Association in the United States, 70% of the properties are bought with loans, 40% of which have zero down payment. In China, as long as parents have the ability to support their children, they will buy properties for them, almost without uncertainty. This is the most significant feature of the Chinese-style consumption of properties. Parents, relatives and friends become a major source of funds for property purchasing. Currently, people who were born after 1980s have become a major force in domestic consumption. According to the Source of Funds for Housing survey, 40% of parents fully support their children’s property with down payment or full payment - in some cities even as high as 70%! Buying a house is the business of the whole family. If parents do not pay for their children (at leat the sons) their first property, they will feel frustrated and even guilty because they fail to offer the children what other parents usually have the ability to offer.

#6 — “Heirloom” Culture

The house is a symbol and embodiment of wealth and status. It is the best way to hold wealth, make it last, and also a family cultural heritage which can be passed down to the next generation. Regardless of being rich or poor, Chinese people will spare no efforts to buy house for themselves, their children or grandchildren. There are many parents who would rather live in a very frugal way, saving every penny just to buy properties for their offspring. This is Chinese culture, the expression of Chinese parental dedicated and selfless love.

#7 — China’s “landlord” complex

China’s feudal society lasted a long time, from 221BC to 1912AD. It has remained a “semi-feudal” society until the national liberation in 1949. A feudal society is a farming community, where land is the main source of national economy, and also a symbol of wealth. Peasants regarded land as their lifeblood, officials considered land as the best legacy for future generations. The emperor bestowed the land to officials at all levels, people in the village would build a house when they had money, became landlords, rented out their land and collected rent. It was almost everyone’s dream at that era. Liberation made landowners dreams unrealistic, but Chinese people’s feeling for land remained and passed down.

#8 — The Chinese regulation offers little protection to tenants

Many Westerners ask: Why buy a house when you can rent? It sounds very reasonable, but after observing the actual situation in China, Chinese people cannot feel the guarantee of “home” in a rental place. Landlords can easily and swiftly kick you out to sell the property or raise the rent. In the meantime, you cannot buy big furniture or live as comfortably as you want because it is a temporary place, and moving can be also quite troublesome with big items.

If you are single, it is still ok, but to get married and have children, who would like to settle in this “home” where there is no guarantee of “settlement”?

In contrast, people in Europe or in the US feel more “secure” in renting properties. For example, in France, rental prices cannot rise freely, they must be performed in accordance with regulations. At the same time, once the tenant and the landlord have signed a valid contract, it must be performed according to the terms and provisions of the rental contract, regardless of the market evolution during this period or any other changes. Otherwise it will be subject to high fine compensation. In the United States, the landlord can not “kick out” the tenants when tenants are jobless or unable to pay the rent.

#9 — The sense of insecurity has made buying property absolutely necessary

Since ancient times, Chinese people, especially the civilians, have lacked social protection and security. During thousands of years of Chinese civilisation, the turbulent eras made people realise that they could only rely on themselves for security, while the government was unwilling or unable to help. Today, the social security mechanism tends to be more bureaucratic, most people are still feeling insecure. The characteristics of the housing can both offer its housing function and substitute to an inadequate social security system. As a result, people are willing to sacrifice other consumptions to buy property. This will not easily change unless welfare system, education, health care and pension are greatly improved.

Considering cultural, economic, and psychological factors, the “love” for properties of Chinese people will not easily alter. With more and more educated, open-minded and bilingual Chinese people, the properties purchasing outside China by Chinese people will only increase in the near future.

This is my first article, I will write more in the future. If you like it, follow me on my twitter :-)

PS: “house” in Chinese is “房”, it means a physical home, not only refer to “house”. For simplicity, the article used “house” as a literal translation to refer to all kinds of properties.