Property — The Safest Investment Bet in China?

Abstract

Prior to the 1990s, most Chinese people lived in state-allocated housing, paying low nominal rents. Then, in 1998, the then premier, Zhu Rongji, privatised that state-owned housing stock, selling it off at low nominal prices, creating the first private housing market in China. Very quickly, many people sought to sell off their state-provided, now privately owned homes to trade up to newer apartments, using the collateral from the home sale, plus accrued savings, which meant many could buy cash-on-the-barrel or by taking out only a relatively small loan.