China housing vs. America housing
The amount of misinformation concerning Chinese lifestyle, living conditions, and cost of living is astounding. I am in Shenzhen China, and when I hear the news on all forms of media talk about China I am appalled at how much of it is utter lies. Here are the top lies told about china homes, and misconceptions about China lifestyle from a first hand observer.
1) “Chinese don’t own their homes.” This is the biggest lie. In major developed cities like Shenzhen, homes are more secure to the home owner than in America. The reason is simple. There is no property tax. In China you have your home tax free for between 50 and 70 years depending on the contract for your complex. In that time you pay no taxes. At the end of that time (which is considered one lifetime) the government makes you pay for the home again, but the payment is much much less than the market price of that home if you are staying. Now compare that to America where the annual taxes are between 2 and 3% on your home. That is 150 to 210% of your homes value paid in taxes over that period of time. Add the interest on the money during that period and it is 4-5 times the value of the home paid in taxes. ALSO. Miss a payment and the government takes your home. This all leads to one fact. In China, you are more of an owner of your home than in America.
2) “The China RMB (Their currency) is purposefully worth less dollars and it should be deflated. In other words they are getting off cheap and need to make their currency worth less dollars” Another amazing lie. In the past 3 years the Chinese have given up 20% of their currency value against the dollar to keep America happy, but we are still accusing them of currency fraud. Well I know first hand that Chinese are paying more (USD) per square foot for their homes than Americans. In fact most items are just as expensive in USD as they are in America, but lets concentrate on homes. As of 2012, the average condominium home in the suburbs of Shenzhen (the cost is higher in the downtown areas), has a per square foot price of $335 per square foot for newer condominiums. That is the price for a New York or Los Angeles home, not a typical American home. Homes in America are cheaper.
3) “China banks have subsidized rates by the government. It is an unfair advantage to the buyer”. No. China banks work they way that banks are supposed to work. They work the way banks used to work in the USA before the bankers found out they could use credit ratings to rape people for rates over 10% a year. In China banking is simple. If you want to buy a home, brink in 30% of the total price and they will loan you the rest. This is why China will never have a housing bubble like the US. It is not because of government subsidies, it is because of government that sets things up right. Loans in China are based on worthiness, not on a fictitious number like a credit rating. That way they are never stupidly leveraged, and never biased on who gets a loan. If we had this type of banking in the US, we would save more and everyone would be treated equally.
4) The family home. In China the majority of families live in a space that is under 1000 square feet. The homes for sale in Shenzhen that are actual houses are in excess of 1 million USD, and many of them are over 2 million USD if they are over 3000 square feet. American homes are the envy of Chinese, except that they wonder why we make all our homes of sticks and drywall. That is substandard and dangerous materials here in China. They make sure that there is a very low fire hazard in any crowded living area.
5) The yard. Very few families have yards in China. Those that do make use of them. If your family is on the first floor of a building and you have a small area of dirt, then you change that into a garden that produces vegetables and greens. Even small home apartments with only balconies have extensive herb and greens gardens.
After only a few days of viewing prices, seeing living conditions, and learning about the banking system in China, you will see that this is nothing like the “communist” picture drawn by American history and American media. China today is much like America in the 1950’s when it comes to banking, family living habits and the idea of pursuing a dream.
Its time for us to update our mental photograph of China. It is time for more Americans to come and see what China is really like, what Chinese are really like, and what China represents as a country. The idea of “evil communism” has to end, it no longer exists.