At first glance, this incredibly high percentage seems to bear little resemblance to what we observe on the ground. We decided to take a closer look at the housing tenure (ownership) breakdown from 2010 Population Census. The data tell us a slightly different story.
First of all, close to 50% of the households surveyed lived in the rural area, whose close-to-100% home ownership (95% of which are self-built housing), skews the number significantly.
Once you factor out the rural households and focus on the urban households**, home ownership rates at the national level drops to 75%. Provincial level data suggests that home ownership in large cities in China, such as Shanghai and Beijing, is quite similar to comparable OECD cities.
Ownership rates also tend to be lower in areas where we see high levels of in-migration. Over the past five years, a large number of people have moved from underdeveloped economic areas (e.g. Henan, Hebei and Guangxi) to developed areas along the eastern and southern coastal regions, such as Guangdong, Beijing, Shanghai, Zhejiangand Fujian. The most vibrant cities in these provinces have also demonstrated the most resilient housing demand (and stable home prices) despite several rounds of Central Government’s tightening policies over the past two years.
Other interesting findings from our quick review of the data: First, while the majority of urban households first came into home ownership through the purchase of heavily subsidized “danwei” (formerly public-owned) housing, the percentage is much smaller today. Nationally, less than 1 out of 5 homeowners came into ownership through the purchase “danwei” housing***. Second, ownership rates do not necessarily correlate with average or median income levels in the city/province. Hebei and Henan reported the highest urban ownership tenure (~90%) amongst family households; roughly half of them own their own home because they built it themselves. In China, self-built housing, which is typically larger in size but built to a lower standard (limited sanitation and heating facilities) is the norm in rural and in fringe areas around the city.
*2010 Population Census, Table 9-4 (Family Households). The following tenure categories are classified as “owner-occupied housing”: Self-built Housing (自建住房), Purchase at Market Price (which includes Purchase Commodity House, Purchase of Second-hand House (购买二手房)), Purchase “Discounted” Economical Housing (购买经济适用房), and Purchasing Former Public-owned Building
**For the purpose of this analysis, “Urban” includes“City” (城市) and “Towns” (镇) data series in the 2010 Population Census.
***The percentage of “danwei” homeowners is higher in SOE dominated cities such as Beijing and Shanghai, where they represent roughly one-third and 28% of the homeowners, respectively.