Marriage and misguided property policies

China started to liberalize its housing market in the late 1990s, which led to a booming commercial housing market, expanded the living space of many ordinary people and made their life much more comfortable. But it also rapidly pushed up housing prices.

The cost of an apartment in many major Chinese cities is now about ten times more expensive compared with a decade ago, so that many young couples can only dream of owning their own apartment. Such a big jump in price within such a short period of time is rare in major economies, except in Japan in the 1980s.

Market liberalization itself certainly should not be blamed. It is the porous market regulation that has created the many problems - including overall economic uncertainties and impossible aspirations of unmarried young people to own even a very small apartment.

It is abnormal that some people own a large number of apartments simply for speculation while others have to endure high rents and home prices. Speculation pushes up prices, leaving many young couples in a hopeless situation.

Various estimates have pointed to high vacancy rates in the property market in major Chinese cities. When wild speculation in the real estate market can go unchecked, if not encouraged, it is the unwise speculation-friendly policies that should be blamed for the resulting economic and social problems.

In an orderly market, where speculation is banned, home prices would become more stable and affordable and at least some young couples would be able to buy their own house.

Of course, many young couples may need to change their mindset and opt to rent a home, which may have some inconveniences but is more cost effective. And I believe they will. But before they change their mind, misguided policies must first be changed.

China is starting to address problems in the property market. For example, the authorities are considering the launch of a tax for those who own more than one apartment. This is in the right direction but, unfortunately, it may be too late for many couples who are abandoning plans to get married as they cannot afford their own home.