China’s growth over the past few years is certainly no secret, and neither is the size of its housing market. In fact, the housing market in the United States looks pale by comparison, and while many economists quite rightly tell us that economic growth in China is slowing down, they cannot say the same thing about the country’s housing market.
For the past three years, the relentless demand for residential properties in China has resulted in a 1 trillion dollar per annum housing market. This basically means that roughly 10 million units are being sold every year, assuming that the average unit has 90 – 100 square meters of floor space. By comparison, the housing market in the United States is worth about 2 billion dollars, or around 500,000 units being sold annually.
One very distinct difference is of course, the fact that in China, high-rise tower blocks account for most new residential sales, while in the United States, it is certainly not the case.
Housing Market and First-Time Marriages
China has a vast population, and as a result, the country sees a huge number of first-time marriages, roughly 11 million per year, and naturally drives up the demand for housing, as newlyweds seek to acquire their own family homes. It is also common for people in China to upgrade to newer and/or bigger homes as they become more financially secure.
Will the Chinese housing market continue at the current pace, or is the bubble just about to burst? I certainly wouldn’t hold my breath waiting for it to slow down. With the one-child policy out of the way, I can only see the market getting bigger in the years ahead.