China Home Slaves

Stephen Chung

Managing Director

Zeppelin Real Estate Analysis Limited

July 2007

No, this article is not about slave labor in homes. Instead, the ¡¥home slave¡¦ is a direct translation of a web-surfer-invented Chinese term which refers to home buyers who, because of the home-buying and mortgage-taking out, now end up having to change their lifestyles and consumption habits in order to save up and set aside enough money for various home-related expenditures, including mortgage payments of course. In short, they are or feel ¡¥enslaved¡¦ by their homes. Reportedly, many households need to set aside 50% of their income for such home expenses, which is an obvious burden psychologically even if not monetarily.

Here are some interesting figures and profiles on these home slaves based on a web survey* done on and with the help from around 15,000 respondents: 

1)     78% of the respondents do not wish or want to become home slaves yet at the same time, 57% of them have already bought a home and thus have become a home slave


2)     54% of the home slaves say their housing expenditures (mortgages, maintenance, taxes etc) eat up 20% to 50% of their income


3)     Another 32% of the home slaves say these use up more than 50% of their income


4)     98% of the home slaves say they feel (more) stressed and worried after purchasing their home


5)     More than 90% of home slaves are less than 35 years old


6)     Most of the home slaves are male, and single male home slaves make up 40% of the home slave group

One is very tempted to ask at this point this =  if the majority of home slaves did not wish to become enslaved by home-buying or to materially alter their lifestyles to suit to begin with, then why did they do it in the first place? The short and simple answer is that this has to do with marriage, or the prospect of it.

These 35 years or younger home slaves were born in the 1970s to early 1980s, after the more turbulent times and when China started to open up in the late 1970s. Many were also the 1-kid generation which in turn means, if you were male especially, the pressure from parents (and grandparents at times) to marry someone and to thus have offspring to carry on with the family lineage could be substantial. And nowadays, it is normal, even customary in a way, for a man to render himself more appealing, i.e. to a prospective bride and spouse, by first becoming a homeowner. One popular motto these days is ¡§the groom buys the home and the bride buys the car¡¨. Not a bad deal for the ladies seemingly. It is also said that many prospective brides would turn down admirers and suitors who have no real estate of their own.  

Naturally, there are always the fortunate few who are either endowed with wealthy parents or have handsome incomes which renders home buying a relative ease. However, for most folks, this home-buying in order to dress up one¡¦s appeal to a prospective bride could very well involve resources from the whole family. A typical arrangement would have parents contributing their pension monies or selling off their typically older home and the son taking out and being responsible for paying off the mortgage. No wonder this prompted an academic to say that nowadays it is much better to have a daughter than to have a son, a new concept given the traditional Chinese preference for sons. By the way, an interesting coincidence is that the polite way in Chinese when mentioning the daughter of a friend in that friend¡¦s presence is to call her ¡¥a thousand gold¡¦. This now appears to be monetarily true too. 

Nonetheless, not everything about owning a home is slavery or burden or no fun. There is a silver lining and it involves a story, unverifiable though, about one such home slave who very creatively utilizes credit card finance to practically finance his home purchase without paying any interest. The story goes like this: first, he gets as many credit cards as he could obtain, and it was reportedly more than ten; second, he makes sure all of these credit cards offer an interest-free period on outstanding payments for at least 1 month and seeks to use up to almost the top limits when using them; third, he gets his friends and acquaintances to buy a lot of stuff regularly through him using his various credit cards, i.e. his friends pay him cash in full and he also gets to keep all card bonus points too and because they buy bulk, the discounts also benefit his friends and acquaintances; fourth; tedious though this could be, as long as he structures the timing and budgeting of and between the various credit card payments and due dates in orderly phases, he could get away with paying no interests on the loans. Again, while this may make interesting reading, the story remains unverified.  

Summing up, the above news and stories confirm one thing, and that is home buying is a common goal for many families in particular the single male, whose motive is also linked to marriage. Like young buyers everywhere, they are also feeling the pinch that home-buying could have on personal and family lifestyles, consumptions, and home finances. Like elsewhere, such burdensome feeling may eventually taper off, as their homes accumulate in value and their income rise (China salaries for the properly skilled and educated could increase by 10% or more per annum) as years go by. Just make sure one does not buy a home which one could not reasonably afford.  

*Web survey: it was not known how the survey was actually carried out e.g. by invitation to targeted groups (a controlled environment) or anyone who happens to see the related webpage could fill out the survey (an open uncontrolled approach), though it sounded as if it was the latter, similar to surveys found in popular websites such as yahoo etc. If so, one must be cautious when reading and contemplating the use of such web surveys. 

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