China’s housing affordability problem is so entrenched that the massive crackdown on the once-frothy real estate sector has made little difference for residents such as Qian, a teacher in the high-tech center of Shenzhen.
For nine years, she’s been sharing a two-room school dorm while saving to buy an apartment in one of China’s most expensive cities. Although prices came down about 10% after the recent market crash, her salary has been cut by 9%. She needs to save for a few more decades to afford her own place. “I was frightened by home prices when I came to Shenzhen, and all the big policy changes didn’t give me any hope,” says Qian, 31, who declined to give her full name discussing a sensitive topic. “The idea that I might stay as a dorm dweller until retirement terrifies me.”
Policymakers have led an unprecedented assault on China’s housing market. Restrictions on developer borrowing have largely achieved the goal of lowering financial risk by kneecapping overleveraged companies such as China Evergrande Group. Yet on the key metric of affordability, so central to President Xi Jinping’s “common prosperity’” push, the results are mixed. For all the pain inflicted on bondholders and real estate companies, housing remains stubbornly expensive in the world’s most unaffordable market. Homebuyers are questioning whether it was all worth it.
