In 2022, the average price for residential real estate in Shenzhen was over 55.700 thousand yuan per square meter. This was the highest price among all major cities in China, with the average price across the country amounting to 17,359 yuan per square meter.
China gradually abolished its welfare housing allocation system and liberalized its real estate market in the 1990s. In 2003, the government declared the real estate sector as one of the pillars of the Chinese economy. Thanks to the country's rapid economic development and urbanization, China's real estate market expanded significantly in the last two decades, with the sector accounting for about seven percent of China's GDP in 2022.
Unaffordable in major urban centers
While the real estate industry greatly contributed to the growth of China's economy, the housing market boom also created social issues and financial risks. In comparison to household income, property prices in major cities, most notably Shanghai, Beijing, Guangzhou, and Shenzhen, are extraordinarily expensive for average citizens. Soaring housing prices have also led to a rapid division of wealth between homeowners and renters. At the same time, debt problems created by the rapid expansion of real estate companies and the high levels of debt accumulated by Chinese citizens have created serious potential hazards for China's financial system.
The Real Estate market market in China is expected to reach a staggering value of US$135.70tn in 2024. It is worth noting that the Residential Real Estate segment holds the largest share in the market, with a projected market volume of US$117.40tn in the same year.
Chinese firms and investors own just over 383,934 acres in the U.S., less than the state of Rhode Island, and far less than how much Canada, Netherlands, Italy, the U.K. and Germany, in that order, each own.
In China, the prices of residential real estate can vary significantly across different cities. For example, as of January 2022, the average price per square meter of a house in Shanghai was RMB 66,801 (US$10,526), while in Shenzhen, it was RMB 71,209 (US$11,221).
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