Why does the middle class rely on houses?

Real estate is the main carrier of China residents' wealth. According to the survey data of CHFS (China Household Finance Survey) conducted in Li Gan, in 20 15 years, the wealth of the middle class was allocated to real estate as high as 79.5%, while the financial assets were only 10.8%. Compared with the data of CHIPS survey conducted in Shi Li in 2002, the proportion of real estate value in China's family wealth is still rising. These finally show the abnormally high housing ownership rate in China. CHFS shows that the housing ownership rate in China was as high as 89.68% in 20 13 years, and the world average was only 63%. Even considering that East Asians are more homesick and care about real estate, Japan is only 60%.

It is not unusual for the rich to buy a house, and the poor really can't afford it. There are so many channels to allocate wealth, why does the middle class prefer real estate? The general explanation is that China's capital market is underdeveloped and ordinary residents lack good investment channels. Even if you can invest in financial assets, the experience of the past 10 years shows that the income stability of investing in commercial housing far exceeds that of the stock market, which is the most stable investment strategy. However, this does not explain why housing prices in second-and third-tier cities such as Hangzhou, Chengdu and Dandong have been declining, and they can still digest huge amounts of real estate every year.

It has been pointed out that real estate is the discounted value of public goods. China's current household registration system is widely used in social management. Whether you settle down, apply for a residence permit or enroll your children, you need a stable residence. Self-owned housing is a necessary condition for obtaining these qualifications or public services. For example, many cities have liberalized the settlement of undergraduate graduates, but limited to no housing, the accounts are generally hung in the collective accounts of talent exchange centers. According to the policies of many cities, collective hukou can only move in and out, and cannot increase the population. Newborns want to settle down and need their own property houses.

At present, the nearest school system in the compulsory education stage and the house with its own property rights are also necessary conditions for a good school district. Therefore, the prices of school districts and commercial housing in big cities remain high. In this year's housing market in Beijing and Shanghai, the school district housing is also the biggest increase.

In addition, we also need to examine from the perspective of social transformation and talent flow, why does the middle class prefer housing when distributing wealth? Wei et al.' s research shows that family planning leads to gender imbalance, and more men compete for fewer women in marriage matching. It has become a hidden rule to save enough down payment for buying a house. Wei believes that in 35 major cities in China, nearly half of the housing price increase can be explained by the phenomenon of gender imbalance. This coincides with the folk story: "the mother-in-law pushed up the house price."

Mother-in-law's preference for real estate is because in the transitional society, a large number of farmers have become citizens, and China's original social identity and reputation mechanism is no longer effective. Commercial housing can not only make the man's income, family wealth and other strengths explicit, but also effectively increase the cost of divorce, or give the woman a living guarantee after divorce.

Even without considering marriage, new immigrants in big cities need a house to prove themselves and show their strength to others. To some extent, the ownership of commercial housing is the simplest and most important reference to reflect personal social reputation and social status. This also means that the process of urbanization and expansion of big cities in China will not stop, and the middle class will always prefer to use real estate as the main means of wealth allocation.