If housing prices are artificially high, but many homes are empty, rents must be low, right?
So I would assume it follows that the danger to the Chinese real estate market is consumer tastes shifting to just renting as is rational, which would destroy a lot of these property companies.
That is, your value estimate changes from a high probability of selling for huge profit to a high probability of renting for dirt cheap.
Currently, rents are affordable when compared to the purchase price of properties.
It's not likely consumer taste shifts; it's deeply embeded in Chinese culture that men need wealth (real estate primarily) and a dowry to a woman's family in order to propose marriage. Combined with far fewer women than men due to China's one child policy [1], it's created two classes of men: those who will continue to attempt to amass wealth to woo a mate, and those who have given up or have looked outside of China for a companion ("lost men"). The wrinkle is that more Chinese women are also opting out of marriage entirely, further increasing competitive forces.
It is hard to ignore cultural norms when you operate in a culture, and these norms are creating inelastic demand for housing. The prospect of being alone for the rest of your life is a powerful motivator.
Maggie Shen King's book _An Excess Male_ is a really interesting speculative take on the long-term implications of this phenomenon. Strongly recommend, it's a good read.
Yes. Under the Hukou System (https://en.wikipedia.org/wiki/Hukou_system), children could only attend schools in the area where your household was registered. If had a rural Hukou, and moved to an urban area to get a job, your children would not be able to attend school in that urban area. You had to leave them behind in your rural area for them to attend school. There have been reforms to the Hukou system in the last decade, so it's not as harsh as it used to be, but it is still much better to have an urban Hukou than a rural one.
In big cities (shanghai, beijing), some public services are tied to housing. e.g. public schools are only provided for local residents or people have houses in that area.
So I would assume it follows that the danger to the Chinese real estate market is consumer tastes shifting to just renting as is rational, which would destroy a lot of these property companies.
That is, your value estimate changes from a high probability of selling for huge profit to a high probability of renting for dirt cheap.