By Chris Lau, Rae Wang, CNN
Hong Kong (CNN) — For the past three decades, China has been a nation of homeowners — supercharging the world’s second-largest economy and fulfilling the dreams of millions.
Since the decline and eventual end of a welfare housing policy in the 1990s, government planning has coalesced with deep-seated cultural norms to create a level of private ownership unfathomable in the West.
While tens of millions of Americans are laden with tuition loans – many well into their 30s, leaving renting their only option – their Chinese counterparts start planning the purchase of their first homes straight out of university.
But a slowing economy and crisis-battered housing market could upend that.
Last year, new home sales dipped to their lowest value since 2014, according to official statistics, totaling only 7.3 trillion yuan ($1.06 trillion), versus 16.2 trillion yuan ($2.3 trillion) in 2021, at the height of the boom.
By volume, new home sales dropped by 8.7% last year, economists from the Macquarie financial group wrote in January, noting that there was “no end in sight” for the downward trend.
Many prospective buyers are now wary of taking on a mortgage.
Among them is Cai Youcheng, a 36-year-old graphic designer in Beijing who has set aside plans to buy for now. Renting feels nomadic, he said, and he dislikes not being able to decorate the apartment however he pleases. But he’ll stick with rentals for now.
“For me personally, if you really do the math, renting actually makes more sense. But deep down, I still really want to own a place of my own.”
That feeling is common in the country of 1.4 billion, where home ownership means much more than just a deed of sale.
In Chinese culture, owning a property represents more than financial stability and social standing. It suggests one is taking care of their family, said Eric Fong, chair professor in sociology at the University of Hong Kong.
“The traditional Confucian value emphasizes so much on family, and that everything should start from the family,” he said.
Traditional tendencies were given license to run wild starting in the 1980s, when China’s communist government launched an era of breakneck economic liberalization. Reliance on employer-assigned housing was reduced, and private ownership strongly incentivized. The push accelerated in the 1990s with heavy subsidies.
“A lot of people, overnight, became homeowners at a very cheap price,” said Huang Youqin, professor of geography and planning at University at Albany. “That converted a lot of people who used to be renters, into homeowners.”
This tapped into another key tenet of Chinese culture: a strong saving habit. Owning a home became the most popular investment as property prices surged, Huang said, with limited other avenues to accommodate expanding private wealth.
Research has pointed to other intangible perks: rural migrants feel more accepted if they own a home in their adopted cities, while parents will buy their children apartments to boost marital prospects.
Streets ahead of Western ownership rates
All of this contributed to China having one of the highest home ownership rates in the world: nine in 10 households own their home, multiple surveys and academic journals have reported.
Over much of the past two decades in China, units that easily go beyond 1,000 square feet in the towering apartment blocks of exclusive districts sold out fast.
Meanwhile in the US, where properties have become increasingly unaffordable and university graduates are often encumbered by tuition loans, home ownership rates lag at 65%, according to the OECD Affordable Housing Database. In other Western countries, many feel resigned