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The real estate market is increasingly becoming a tool for making money rather than finding a residence, and observers are worried this will inevitably undermine social fairness.
It has been significantly more difficult for young people, starting from scratch in big cities, to realize the dream of buying a home compared with older generations. Before 2008, in big cities like Beijing and Shanghai, hard work could be expected to lead to home ownership. The cities developed quickly and provided abundant opportunities for new graduates and young people coming from other places. Many of them were able to afford a deposit to buy an apartment after several years of work and make the city their home.
Now that housing prices are easily seven or eight times the prices of eight years ago, the chance of buying a home is quickly vanishing.
Breaking down the demographics, people born in the 1960s and 70s mostly bought homes before prices took off. For the 1980s generation, who began working in the 2000s, some people bought homes and others could not. People born in the 1990s and in the new millennium are the most unfortunate, blogger Liu Chang wrote. Even though many of them have managed to make more than 100,000 yuan per year, without help from their parents, paying for a deposit to buy a home in the big cities is virtually out of the question. In Beijing and Shanghai, average second-hand properties now costs more than 50,000 yuan per square meter.
In the face of the price irrationality, people who have bought at least one property feel relieved and hope the price increase continue and expand their nominal wealth, while those who hesitated and missed the boat only wish to spear the bubble.
An observer going with the name Murong Suifeng wrote online that a "chain of disdain" among three classes of city dwellers has formed in China's big cities, like the food chain in the wild.
Chain of disdain
On the top of the chain are the carefree aboriginals. In Beijing this group consists of the hutong clan and the "compound clan," who are mainly the offspring of people working for Party and government institutions. They have long been living a better life than the majority.
The hutong people are not as carefree as the compound clan. With the fast expansion of Beijing, the old hutong, or historic neighborhoods in the center of town, have either become valuable cultural heritage sites, which can't be turned into money, or are at risk of being seized for redevelopment, putting the residents at risk of having to move to the suburbs. Until that happens, these people can have a comfortable life, barely feeling the stress of living in a metropolis.
This group can look down on the second category, mortgage-paying "house slaves." Distinct from the aboriginals, these are migrants working in big cities like Beijing.
They are well-educated, have a decent job and good background. Though they can't afford a house by themselves, their family can at least help dealing with a down payment.
But they need to pay back house loans, and a big proportion of their income goes to the bank.
The increasing rise of house prices makes them believe, as long as they have a house, their prosperity is guaranteed. Their children may even become aboriginals.
The rising of price of their homes also gives them a sense of security and the courage to spend their money on other things.
Although disdained by the aboriginals, they will at least have their own homes after several decades of struggle.
The bottom of the chain is the Ant Tribe with no housing. This group of people, also migrants to cities, live in rented humble abodes, and share housing with others.
They are at the base of the social pyramid. Increasing house prices brings them many problems, but not as much as one might think, because the level of rent right now is much lower than the cost of paying a mortgage on a similar home .
This group of people are regarded as impoverished in first-tier cities. The rising of real estate prices touches every raw nerve of them. (But if simply looking at their equity, they are quite rich.)
These three groups of people form a chain of disdain, aboriginals looking down upon newcomers, and people with homes looking down on those without.
With home prices skyrocketing, the gap between the three groups is growing bigger. People on the top rung not only live a carefree life but also enjoy the delight of looking down upon others.
But in the third group, the quality of their life is deteriorating. Their chance of squeezing into the mid-level has become minimal.
This is the reality of life in first-tier cities like Beijing, Shanghai and Guangzhou, among others, and represents today's social polarization. When people are categorized not according to their ability or future, but on their house, the value system of society is in danger of crumbling.