Chinese Land-Use Rights: What Happens After 70 Years?

Residential apartment buildings under construction in China.

From NetEase:

Media Discusses Land-Use Rights: What Happens To Houses After 70 Years?

Xinhuanet Beijing October 4 report — After the 70-year lease/land-use rights for commercial residential housing expires, what do we do about our homes? Are the land-use rights automatically renewed/extended for several decades, or must a land transfer fee based on the land prices of the time be paid, or are there other new ways? With the “using the home for elderly income” [reverse mortgage] policy beginning to be tested in certain areas, the “what happens to houses after 70 years” problem has once again become an urgent and real issue.

Worries about 70 years

Chen Zhuoy, who just recently purchased a commercial residential property in Beijing, originally didn’t think about what happens in 70 years, until she inadvertently saw the “Beijing State-Owned Construction Land Supply Procedures (Trial Implementations)”. Clearly stipulated in this 2005-issued local legislation, “at the expiration of paid land-use, land-users who need to continue using the land should submit an application with the land administration department one year before the expiration of the land-use term, and those who did not apply or who applied but were not approved shall have their land-use rights returned without compensation to the government at the expiration of the term.”

“Expiration”, “not approved”, “returned without compensation”, such wording made Chen Zhuo begin to worry about the fate of her home. Upon thinking that one day the home her entire family had poured out all their money for may not be hers, Chen Zhuo’s heart was filled with worry. “In 70 years, is my home still my own? Or to put another way, what do I have to do for it to continue being mine?”

This is a question that every commercial residential property owner has to face.

In our country, the highest number of years for land-use rights transferred is: Residential Use 70 Years. After the expiration of the 70 years of land-use, the land is returned to the country while the buildings on that land remain under the possession of their owners. However, “with the skin gone, where does the hair adhere to”, so the expiration of land-use rights actually implies the expiration of ownership of the entire building, and this is precisely the root of people’s worries about “70 years later”.

According to the provisions of Article 149 in the “Property Law”, at the expiration of land usage rights for residential construction, it shall be renewed automatically.

According to the provisions of Article 22 in the “Law on Urban Real Estate Administration”: At the expiration of the stated term in the contract for the transfer of land-use rights, land-users who need to continue using the land should submit an application for extension one year before the expiration of the land-use term, and all land that needs not be reclaimed in accordance with public interest should be given approvals. Extensions shall require a new transfer of land-use rights contract to be signed, and land-use transfer fees paid in accordance with regulations.

So it is clear that in terms of the law, home-buyers have the right to apply and obtain extensions upon the expiration of their land-use rights, but there the specific clauses of the law provide no clear provisions on the the standards or procedures for the fees of extending land-use rights. This vacuum in the law undoubtedly leaves people space for imagination, “at the extension 70 years later, just how much of a price do we still have to pay?”

A Chinese man holds up his real estate certificate in front of a nail house in China.

Various Speculations About What Happens After Land-Use Rights Expire

At a 2011 land auction in Shanghai, the “corresponding residual value for grantor’s reclaiming and compensation” provision amongst the prerequisites for pre-application had aroused a new post-“Property Law” round of debate about how the expiration of land-use rights would be handled.

To reapply for land-use rights requires paying an additional land-use right transfer amount, but how much needs to be paid, according to what guidelines, and whether or not owners who possess residential property rights [to the buildings on the land] are willing to pay it, are able to pay it, and what if one homeowner is unwilling to pay it, then how is the building on the land supposed to be handled? For the moment, there are no [government] policies whatsoever capable of answering this series of questions.

Some people pessimistically believe that when the 70-year land-use rights expire, it’ll be a situation where “the building follows the land and the government will compensate”. After all, the value of buildings drops with the passing of time whereas the value of land is the exact opposite. However, this social and economic costs involved in such a handling are excessively huge, and in the Shanghai Yiju Real Estate Research Institute Vice-President Yang Hongxu’s view, this is unlikely to become a widespread method [of handling this problem].

Yang Hongxu believes that, in accordance with the “automatic renewal/extension” spirit of the “Property Law”, ensuring the legal rights of property owners ought to be the starting point of legislation and that the possibility is extremely small that the land would be simply taken back or that people would have to pay for the cost of the land based on its market price at the time. “The government will adjust the policies in a timely manner, and a relatively complete and fair law/legislation will definitely be enacted before most land-use rights expire.”

An incomplete land system reform

In 1990 May 19, the People’s Republic of China State Council Decree No. 55 “The Provisional Regulations for the Provision and Transfer of People’s Republic of China on Urban State-Owned Land Use Rights” was announced and enacted, with Article 12 of the regulation stipulating: The highest number of years of land-use rights are to be determined by the following applications: 70 years for residential use. The government regulations stipulated that the state, companies, and individuals can pay for and trade usage-rights.

Although the “70-year land-use rights” issue suffers from controversy now, looking back on our country’s history of reform and opening up, it’s not difficult to realize that from the prohibition on the renting or sale of land to allowing the provision and sale of land-use rights, this is undeniably a milestone-like progress in the process of economic development. “70-year land-use rights for residential use” is itself an important result of land system reform.

In fact, having time limits on land-use rights is not unique. During the early planning stages of the system, it was influenced by Hong Kong’s land-use and trade/sale system. Whereas in Malaysia, Singapore, and other countries, this kind of transfer of land-use rights but not actual land ownership is also common, with the difference only being in specific year limits. Given the experience of these countries and areas, on a foundation of sound relevant legislation and policy, based on a respect for citizens’ private property. the extension of land-use rights will not cause serious social problems or infringe on the lawful interests of property owners.

However, from the formulating of our country’s relevant laws to now, over 20 years have passed. With the laws and regulations of the time not excessively touching upon the issue of what would happen 70 years later, and with the “age” of many commercial real estate increasing, a problem that was originally left for the future to resolve is becoming extremely pressing and this piece of land system reform from over 20 years ago urgently needs new footnotes and a more complete system. “What happens to land-use rights after 70 years” is not just an individual problem that home-buyers are concerned with, it is a problem that must be answered for continued China land system reform and development.

Comments from NetEase:

xiaobao1757 [网易广东省广州市网友]:

I’ve never worried about [what happens after] 70 years, what I worry about is how many year before my home collapses. To tell the truth, of the commercial real estate being built these days, how many will still be standing 70 years later? The majority of people probably have no idea!

花開o [网易四川省乐山市网友]:

The biggest enemy of the Chinese people are the “public power/authorities” who wear the coat of [act in the name of] “the country, the race, the people”. It leads everything, is not subject to normal restrictions, including the law. It stops at nothing, it’s everywhere, it’s omnipotent, and does whatever it pleases.


I see the plan/calculation of public servants is like this:
1. In the first 30 years, housing prices soar, to clean out your several generations worth of savings.
2. In the last 40 years, real estate taxes are collected, forcing you to sell your home.
3. 70 years a cycle.

网易四川省成都市网友 ip:182.151.*.*: (responding to above)

You know too much.

一北京老头一 [网易北京市网友]:

A certain Land and Resources Bureau has already given an official answer: “1. Land administration laws stipulate that the longest [land-use rights period] for residences is 70 year and there is no regulation that it has to be 70 years; 2. 40 years later, we don’t know if we’ll still exist in this world, so don’t think too far into the future.

网易江苏省南京市网友 [达人达理]:

The first batch of housing are about to reach 70 years so there will be an answer soon enough.

网易福建省厦门市网友 [游宾]: (responding to above)

Then what about the ancestral homes from the Qing Dynasty that were passed down? It’s long been over 70 years. Are they going to be confiscated?

网易江苏省南京市网友 [达人达理]: (responding to above)

If we put it like that, any building that was from 70 years ago are considered to have expired already, right…?

网易辽宁省葫芦岛市网友 [中国梦o撸到醒]: (responding to above)

How many years has it been for the Forbidden City…should it too be…?

人民日报人民日 [网易天津市网友]: (responding to above)

Did you people not read the article? They already said, your homes will still be yours after 70 years, it’s just that the land will be reclaimed, so when the time comes, we just have to tear down our homes and take it away ourselves because I’m positive those bricks belong to us!

网易浙江省杭州市网友 ip:115.196.*.*:

The leaders express leaving this problem for the next generation to solve.

唯一0755 [网易广东省深圳市网友]:

How many residential homes in China can be used for 70 years? Usually commercial residential real estate are designed with just a 30 year lifespan, and this doesn’t even factor in skimping on the work/shoddy construction and other man-made issues.

网易上海市浦东新区网友 ip:58.33.*.*:

When that time comes, we’ll once again struggle against local tyrants [land-owners] and split [redistribute] the land.

What do you think will happen once land-use rights expire after 70 years?

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  • Washington Bullets

    At first glance, I see 70 years as being an arbitrary number. However, I think to some degree, so long as there is compensation for the property upon it’s return, then 70 years seems pretty fair, If one buy’s a house at 25 (if you’re lucky) then you can have it until you’re 95, and there’s a good chance you’ll be dead. You also have 70 years to renew the thing, so don’t be delinquent. most wealth in the united states is inherited, so maybe this is a mechanism of reminding everyone of class struggle so the landed rich do not return to become rich peasants or landlords as before the revolution.

    • Atlas

      “so long as there is compensation for the property upon it’s return”

      Nope. No compensation.

      • Washington Bullets

        True, but 70 years. That’s a lot of time to live in the same apartment though, and so long as you renew it through the proper channels, hopefully you won’t be booted off the land.

        Then again, who knows with the way things are going.

        • JesusFuckingChrist

          Yes but the government has the right to deny your renewal and forcibly take your home. Here in the States we have property tax. Does this mean they don’t have to pay property tax in China?

          • Repatriated

            Some cities (Shanghai, Hangzhou) are starting to charge property taxes now. I think more than anything, it’s an attempt to keep people from buying too many apartments. LOL.

          • Kai

            It actually is to discourage people from speculatively buying too many apartments and further driving up market prices so you’re right in what you think. IIRC, it’s more like a gains tax than a traditional property tax though. You pay a tax on realized appreciation I think versus paying a tax every year on the value of your property. Someone correct me if I’m wrong. It’s not something I’ve run into yet.

    • Repatriated

      I think people are more concerned with passing the property on to family more than just 1 lifetime.

  • 剑胆琴心


    • Lord_Helmet

      Hands down, best comment by you ever.

      • Cauffiel

        Stop encouraging her.

      • lonetrey / Dan

        I think that’s her way of saying “these are pearls of wisdom!”…

    • Middle_Kingdum

      Bunny’s simple comment may appear meaningless at first, but the deeper meaning and context of her insight speaks volumes. I salute you, madam!

      • mr.wiener

        That’s deep man…uh really like profound you know….uh don’t bogart that doobie man, puff puff pass.

        • Middle_Kingdum

          Who is Bogart?

          • The Enlightened One

            Humphrey Bogart?

          • Middle_Kingdum

            Oh, right. Brother of Doobie man, then?

          • Peter Wilton Cushing

            The actor>?

  • Peter Wilton Cushing

    Again, rule of law people, rule of law.

  • Love the British free hold system. Do they have strata law at all in China? That’d be my main concern.

  • Wayne

    It’s 70 years from the day the house is finished and for sale. If you buy a used house that’s already 20 years old, you’ve only got 50 years left. 70 years is about time to knock it down and build a new one. That’s reasonable I think. Nobody lives in the same house 70 years though anyway, do they?

    • Angie Mac

      You’re absolutely right. A lot of people don’t consider that most property are flats in China. Not actual houses. If it is a house in question, then this logic would have held up for me. As you could rebuild or renovate your home. But when you’re just one home in a building of many, that’s not really feasible.

      • firuba

        In Europe there are houses more than 200 years old still standing. Here the problem is that you are paying an incredible amount of money (more than 5.000 Euro/ 7.000 US$ per sqm for an already 25 years old property!) for a leasing. That is, if compared, Housing in China cities like Beijing, Shanghai and other are the most expensive of the world. You are not buying a house or a flat, neither the land they stand, just a lease. So if you are 65 and want to sell it after 40 years (if you bought it new), then its value will be reduced drastically, as you can reasonably only sell the resting 30 years lease… or less.

        • The Enlightened One

          Exactly, people who pay that much are paying it because they have the money, can bribe the right people for extensions or whatever to keep and continue their property… AND it is most likely purely for investment purposes. If they didn’t have a progressive plan and an out plan… then they are just morons.

  • Angie Mac

    What’s interesting is that an acquaintance of mine, who is either in the government or extremely connected, told me that there are two lease times. For apartments and more recently built buildings (mainly city) the lease is 70 years. But he swears that for older places, like the more traditional houses in the country, it’s 120 years.

    To be honest, I don’t think (at least in the beginning) it’s going to be an issue. If they mistreat people whose 70 year lease has expired badly, it could result in a serious collapse of the real estate market. People would be too afraid to buy property.

    • Peter Wilton Cushing

      Are you any relation of a bbc radio 1 dj?

    • loki

      imagine … there is a house you want to buy( how about a whole city ) that had been built pretty much 65+ year prior… buying a house would be insane… your only going to get 5 years out of it before having to pay some “Fee” …. this is going to be very interesting what the Chinese overlords will decide to do …

      1. Huge tax every 70 years.. opposed to a small tax yearly
      2. just letting people live tax free in the home but have to renew.. every 70 years
      3. make them buy back the property for a decently huge price again.
      4. or ignore the problem and play dumb when people come asking…

      I personally think the government back themselves into a corner .. no matter what the choose.. the market will react badly to it…in one way or another.

  • don mario

    the number of years isn’t really the point. the point is that after 70 years you are basically up shitty creeky.

    there is only vague information on what happens next, you can apply for extension, who knows if you will get it? the party control the law, there is nothing you can do about it, chances are your house is now in a prosperous area and they will do better by kicking you out and selling it on than by keeping you living there.. so you might end up a 90 odd year old person just being kicked out of the house you paid for fairly and squarely. or maybe it happens to your kids, if you bought the house for them.

    its fucked up, why would anyone agree to such a thing? just leave the place. everyone living there who isn’t a party member should just plan to LEAVE its not gonna get any better if they continue to let themselves be shat upon from a great height at every opportunity.

  • Stu

    It still blows my mind that so many people are willing to pay the insanely inflated house prices in the big cities. Sure, house prices in, say, the UK are high (though Beijing and Shanghai apartments are now beating houses in most of the UK, I think). But the thing is, in the UK you pay your money and you own the house. What do you get in China? What guarantee is there?

    • loki

      yeah yeah … China is unfair.. blah blah … in the US and I am sure lots of western countries .. home owners pay a yearly property tax .. and if not paid the house can be taken and sold.. now then in China no taxes are paid every year, but every 70 years or so you have a balloon payment you need to make …

      • Germandude

        True that. Still, there is a difference. The house and the land is yours, until you fail to pay your property tax (for a long time). Now in China, the land is not yours. Ever heard of forced demolishing? I mean, in Europe or the US?

        • Nessquick Choco

          And the tax is 0,05% of its value, or even smaller

          • loki

            no…. most cities differ but you can assume its around 5 % yearly of the value (which the city decides and increases every year without asking you ) now multiply that by 20 years… + the yearly increase in value… ummm yeah I like the 70 year deal in china better.. (tidbit: I am a born and raise red blooded American)

          • mopedchi

            5% annual property tax? Where? That seems really high. I’ve owned 3 houses in California and the average is 1.1%. Portland has a higher rate but the assess value (tax base) is much lower than the market value.

            At least I get a tax bill detailing what I’m paying for. In China, it seems like no one knows what will happen. My guess is you have to out-bribe other interests to keep your house.

          • Nessquick Choco

            I have just search it, and in Czech , the property tax differ on the object, land is about 0,25-0,75% of value. For house is 0,1usd / sqm, if property is for business than is 0,5usd/sqm. there is many categories, but I chosed most common, and cheapest and most expensive. also, it differe from city to city, as the can add some koeficient to it. anyway, not that much for normal 120sqm house 12usd per year ? plus something.

          • Germandude

            Like loki said, I assume it’s 5% tax. I don’t have the problem of property being taxed. I’d have a problem if I built a house, moved in, being happy, then suddenly being kicked out and sent to the suburbs with a new apartment/house as compensation for a fraction of the monetary value, not even mentioning the sentimental value of my “own former” house. Just because some new compound needed to be build right where I lived.

            In Germany, farmers get very well compensated when their farmland is bought by the government. “Eminent Domain” as 白色纯棉小裤裤mentioned, doesn’t leave anybody poor in Europe. In fact, everybody knows to refuse governmental offers as long as possible because they will raise their offers several times before going to court and seize property. In Germany, I’ve never heard of a farmer not becoming a millionaire because he was lucky enough that e.g. there was a railroad to be built on his ground.

            And since this game takes a long time to play, many of the bigger projects in Germany take long time to plan and build.

        • loki

          ummm… in my home town actually yes force demolition.. to make way for the cross town freeway missed my moms house by 2 houses. but everyone had a choice. take the money the gov. thought the house was worth or not but the freeway was getting put in .. also no not a long time, the government puts a lean first and let it build until the interest builds then they take it .

        • 白色纯棉小裤裤

          Ever heard of Eminent Domain?

      • Stu

        You’re right, the comparison to property taxes (and inheritance taxes) does help to explain it. But still, in most countries when you buy a property you officially/legally own it. Look at the wording up there- in China you don’t own the property, you just get 70 years of ‘land use rights’. And how much will you/your children have to pay to extend the lease? Nobody really knows.

        When you add in the general uncertainty about whether the government that granted you rights will even exist in a few decades… I just find it surprising that people are willing to pay so much.

      • 如果你能读懂这些文字,你就是个老外

        Not a good example, cause u never own the land in china, plus real estate taxes are coming to the chinese too, they are being drafted as we speak.

        • Warlock

          Your avatar is annoying, and will cause trouble here, just saying!

          • 如果你能读懂这些文字,你就是个老外

            mhhh, just asking: annoying to whom? trouble from whom for what. Please be more specific or better link to the avatar “etiquette”, i am afraid these just exist as voices in ur head .

        • 白色纯棉小裤裤

          The tax only applies to those who bought more than one homes.

          Plus you never truly own something if you have to pay a fine every year to keep it otherwise it would be taken away from you.

          • 如果你能读懂这些文字,你就是个老外

            “The tax only applies to those who bought more than one homes.”

            haha, that means everybody in china will have to pay these taxes, what makes matters worst they will have to pay for empty spaces in empty neighborhoods.

            “Plus you never truly own something if you have to pay a fine every year to keep it otherwise it would be taken away from you.”
            Really? Tell me who owns your car then?

            Or better how is it possible you have to pay management fees for your little 53m2 apartment?

            Real estate taxes are used for the same purpose, they are management fees for the surroundings of your home.

    • maybeabanana

      They work hard to earn the ever advertised holy grail of “owning” a home for the sake of face or whatever they think is the best they can do in life. They don’t think which is what is wrong with them. Aside from ridonkulous pricing, they already knew about their communist nature and they expect to actually keep their property?! Shockers. They can never OWN anything if they continually have to pay taxes or whatever rate that the govt decides to place on them. Naive is what they are.

    • The Enlightened One

      I bought an apartment in a lower tier city. Cheaper than a city like Shanghai and Beijing but I worried about the 70 years thing too… I guess it doesn’t really matter… I see China having better laws and regulations for home owners at that time… because if they don’t… the government they have now probably won’t exist and I probably won’t live here because the country will be in a state of revolution lol.

      • jeffli

        you think so?

    • Kai

      There’s definitely a sort of optimism in it, at least for those who are buying for actual residence versus speculative buying and selling. It’s an optimism that the government will ultimately do right by them and have a reasonable solution for a known open-ended issue. It’s an optimism in the future stability of China.

      In the UK, you ostensibly pay and own the LAND the house is on. In China, you don’t own the land, as Germandude said, but you technically still own the house (or the part of the apartment building). That’s why there are jokes about having to move your building away if the government reclaims the land. Heh.

      Frankly, in this day and age, there actually isn’t really any ultimate guarantee. Everything is only guaranteed by the existence and whims of the government you live under, and I think a lot of countries have eminent domain laws where the government can take your property as long as it has a reason to and compensates you.

      China has the same thing now, as in laws requiring just cause and appropriate compensation, but there are just a lot of things that indicate the government places less obstacles for itself when it wants to do something. Still, it’s ultimately always going to be a lopsided battle between the government and an individual homeowner no matter where you are if it comes to it.

      I own my place in Shanghai so I’ve definitely rationalized the purchase and consider myself a bull with regards to China’s future prospects. While rents are going up, Shanghai has long been a place where buying has cost way more than renting. In many other top property markets in the world, rents can pay for your mortgage. Not really so in Shanghai, so it was a big decision. When renting can solve the basic issue of having a place to live, buying a place in Shanghai then becomes more about whether or not you think it will keep its value and end up appreciating enough to come out ahead of renting. You’re speculating about property value appreciation as well as rent growth.

      I see Shanghai as being like New York though technically it has plenty of land to sprawl out on (something its arguably doing) like Los Angeles. But downtown Shanghai will remain downtown Shanghai. So long as China plays an important economic role in the world, there’s a lot of upside especially for its most internationalized and metropolitan city (outside of Hong Kong). I think property values will keep even if it doesn’t grow, at least where I am, so I’m not too worried about losing money. I also think rents are going to go up and they have over the time I’ve been here, so I think the balance between mortgage payments and rents is getting better.

      Again, all of this is ultimately speculation about future trends, but that’s my rationalization. I don’t plan on staying in Shanghai forever, but I wouldn’t mind keeping a decent property here. It’s diversification of assets for me.

      • The Enlightened One

        Same thing with the city I live in… I did the math and if I rented the place out.. by the time the 70 years is up, I would have JUST paid it off… but that doesn’t account for inflation or crashes.

        But I guess I have been here 7 years and I am married to a Chinese national and I was impressed (which I very very seldom am) with the design and construction plan. It was hard to rationlize to myself, three years ago I wouldn’t even entertain the idea… seemed like a poor investment.

        But the design did impress me, the price was right for a 140 square meter flat (although still very expensive for normal folk in this city). You know what the biggest reason was?

        Because the area was designed for silence and I can’t stand renting anymore. I can’t rationalize buying nice things to myself while I am living in someone else’s place like plasma TVs or whirlpools and stuff lol…. but that’s gonna change!

        • Kai

          Hahaha, yeah, you can’t quite improve the nest when the nest isn’t yours! Reading another comment of yours, it sounds like your place is still under construction and you haven’t move in yet?

          My place was second-hand, built at the turn of the century (so I have like under 60 years left on my land lease!), and of an older design before more modern Western design conventions started dominating the developments here in Shanghai. I’m not fond of the exterior of my community but the prior owner had very nice Western interior decor so that, and the prime location rationalized this place.

          Does your development have a website with artist sketches and floorplans? If it does, would you mind sharing it so I can check it out? What city are you in anyway? If you’d rather not share the website publicly for privacy reasons, could you email it to me with the contact form? I’ve always loved looking at floor plans and imagining the living space. Would you mind sharing your per sqm pricing as well? I’m just curious. In Shanghai where I am, it’s at about 40k conservatively.

          Sorry to everyone else reading, this is the sort of boring conversation homeowners and homebuyers talk have. This sort of stuff never mattered when young.

          • Claude

            Sorry to snoop but I assume that’s in CNY?

          • Kai

            Per sqm rates? Yeah, CNY/RMB.

          • The Enlightened One

            Whenever you ask about house prices in China they will always say the cost per square meter and never the total cost. Just the way they do things.

          • The Enlightened One

            Yeah it does, we were given brochures and taken on a tour of some that were nearly completed. I wouldn’t mind sharing that in private. 40k RMB per square meter?

            That’s pretty crazy… so you are telling me that for the 140 square meter apartment I bought… that it would be nearly one million dollars in Shanghai?

            Sent you the info btw.

          • Tark

            40k per sqm, geeze. I thought brand new apartments here in Sanya, at 20-30k psqm was batshit.

        • The mighty one

          Living here for almost 4 years and thinking to buy an apartment here too…Shanghai is too overpriced, so I guess I will probably look at the Kunshan area which is still close to Shanghai…

          • 剑胆琴心

            yes,i just went to a new apartment’s close to shanghai and not far from subway somewhere between qingpu and jiading.maybe it’s good choice for you.if take subway,will take 1 hour to downtown shanghai.

          • The mighty one

            Jiading is still expensive, the only option is huaqiao in kunshan… still affordable, but getting expensive in the near future like all real estates…

          • 剑胆琴心

            oh,yes,this one,guess it’s the same place i went to.
            i think it’s a good choice,not expensive and latter subway will be there.hurry up!after subway,the price will be up,and easy to rent it out.
            but why you must buy apt in shanghai?your wife or gf ask?

      • Claude

        Well, this has turned out to be refreshingly educational topic. I didn’t know about the lease and I always wondered what it was like to buy in Shanghai. I love the city but had to leave because I couldn’t acclimate. I guess I’ll have to live vicariously through Kai. What you were saying about rents are so true. I couldn’t believe how inexpensive Shanghai was to rent after living in Tokyo. I found a studio in Shanghai for $480 CAD in a city of it’s importance and size is pretty amazing. Perfectly nice place; small of course but I was just there to get a feel for it. It turned out to be a working holiday, really. Sad it didn’t work out, guess I’ll always be a tourist.

        • The Enlightened One

          Did you leave China?

          Shanghai is a great city for the foreigner that wants a touch of both worlds but maybe you would find a better liking to a smaller city. China is like an ice cream shop… there are so many different flavors it is hard to try them all.

          • Claude

            I was sick way too often. I don’t think it would of mattered where I went. Someone told me it was an MSG allergy. I’ve never heard of such a thing. China is really more diverse than people want to believe it is isn’t it?

          • Kai

            MSG allergy would suck and it probably isn’t it because it’s found in so much processed foods anyway. You weren’t drinking tap water, were you? Too much dining on the streets? Or was this not a digestive track sickness?

            I have a lawyer friend who spent this National Day holiday in Beijing and posted on Weixin the air quality readings from both cities. It was kinda hilarious in the sterotypical Beijing vs. Shanghai rivalry way because Shanghai had like PM 2.5 readings of 19 and 20 while Beijing was like 300 and 400. He said he must’ve taken the wrong medicine to have chosen Beijing to spend the holiday.

          • Claude

            The MSG thing I’m sure is a Chinese myth propagated by the foreign community. I ate in restaurants so I don’t know what the quality of food preparation is like, poor I’m sure. Having said that, it was sooo goood.

            I spend four months in Beijing 3 months in spring and one in autumn. The Autumn is really nice.You already know the sky’s clear up and the city it takes on a real charm. Spring is crazy, those sand storms that blow in like locust. I was riding my $20 dollar bike with my new contact lenses when I looked up and saw this cloud of sand rolling into the city and I tried to get back to my hotel before it hit. Of course I didn’t make it. I was completely blinded and had to go new contacts. The pollution? It’s like breathing pea soup.

          • Nagurski

            It’s alimentary that running around on a digestive track will make you queasy.

          • Kai

            Yeah, Shanghai is a nice city and it’s just getting more and more international. Where I am, there are more and more what I call “expat/foreigner patches” popping up, meaning foreign restaurants, cafes, bars, etc. where expats, foreigners, and increasingly white-collar and other well-heeled locals congregate. It’s like a different sort of gentrification (since the area was already decent beforehand) and its fascinating to watch.

            Is your development one of those large communities with a lot of green spaces and somewhat isolated or separated from commercial shops/restaurants? There are more and more of those sort of developments and they’re good for peace and quiet as well as a measure of green tranquility but one of the things I love about living in a city is being able to go down the elevator and immediately have food and services nearby without requiring a car or a trek out of the residential community.

          • The Enlightened One

            No actually is it what will be considered the new heart of the city, or the new developmental zone. All the government officials are going to move up there, it is closer to the aiport and the new bullet train is going to go through there.

            There will be tons of shopping, resturants etc. due to tourists and transportation hubs. Their catch phrase is “Live happily in the beautiful gardens of the city center.” The layout is like 15 buildings of various heights in a xiao qu with a massive underground parking. No cars or motorcycles allowed above ground… the pathways between the buildings will be filled with pavillions, man made lakes/ponds and gardens.

            I guess the company is very reputable because they have had 21 projects in 21 years within the city. So if they sucked or scammed people, word would spread fast and they would be out of business after the first project.

          • Kai

            Already responding to you over email but just to respond to this comment, if the development plans work out, your place will certainly appreciate over time as the city grows around it.

          • Peter Wilton Cushing

            Shanghai is a nice city and it’s just getting more and more international

            Is that a good thing? To me it seems a bad thing, as it means higher costs and more GWs?

          • Kai

            It’s a good thing for someone like me who is attracted to the “international”. It does mean higher costs but those come with benefits. It all depends on what you value. What does GW mean?

          • Peter Wilton Cushing

            It does mean higher costs but those come with benefits

            Benefits? Expensive imported goods? I’m of the mind one should make do when in China, or not bother at all, but at the same time not be a GW (grovelling weasel) googley eyed sycophant. Shanghai is a crap place to me, and full of sluts to boot. Each to their own. Cheers sir!

          • David

            Wuxi is close enough to Shanghai without being IN Shanghai. It is nice for a city, although I prefer my house in the burbs back home in the States if we are talking comfort haha.

          • Peter Wilton Cushing

            I prefer my rural area of nanjing, but then I am a hermit who doesn’t shave and doesn’t much like going out. There is a bar where I go once a month, but I don’t tolerate it much, overpriced and full of snivelling fawning GW’s.

          • David

            OK, I have to ask what a GW is. I have been in China less than a year so my knowledge of the local slang is sort of limited. I would also prefer something more rural (I actually prefer non-city China better, even though it is not as modern) but I am within walking distance of my school which makes it convenient.

          • Peter Wilton Cushing

            GW=Grovelling Weasel. Used by western old china hands to depict any naive foolish newbie who is all googley eyed at the place and thinks everything wonderful and bends over backwards to appease the natives

          • Peter Wilton Cushing

            True, and I prefer smaller cities, cheaper beer, and less western GW’s to have to deal with. Here’s to the 2 kuai beer sir!!!

        • Kai

          $480 CAD is about 2850 RMB at current exchange rates. How big was your studio and what location? I had a tiny ass studio for about half a year for about 2000 RMB and then a much more decently sized one for 2200 RMB (I forgot, maybe it was 2500) all in the Jingan District Caojiadu area. I imagine they’re over 3000 RMB by now though. I wish I could remember off the top of my head how much the new 2bd furnished apartment I rented back in ’06 was.

          Rents are partially so cheap because average incomes are so low. People can’t get away with charging more. When I first came to Shanghai, I was also very bearish on buying a place here but over time, I became bullish. Still, I don’t plan on raising a family in a city because I grew up suburban and it’s the mental model for childhood that was imprinted into me, but I saw an opportunity to own property in a downtown area and took it. *Please let this be like Manhattan*

          Hah, yeah, Tokyo is incredibly expensive and affordable places can be kinda uncomfortable to live in depending on what you’re used to. That said, I’ve always liked clever uses of space and it’s still a place I’d like to live for a few years one day. I’m not one of those people who travels all the time whenever they can but rather one of those people who wants to live in diferent places for extended periods of time to soak in the local society and culture and really get to know it. Major cities is my thing, where things are happening the most, where the country intersects, where the world often intersects with the country. London is another destination for me, which is also incredibly expensive. People who think like me would probably prefer Hong Kong but HK never appealed to me as a residence.

          • Claude

            The apartment was big enough and that’s what I’ve grown accustomed to living in Tokyo. I’ve really learned to love small space. I just live with less stuff. I do a little research on the small home movement or small pre-fab type stuff. They’ve clearly taken their influences from the Japanese with storage etc.. I’m a city person also, if your going to live in a city – live IN the city so I wind up living in small spaces. The cost of living is climbing everywhere so a lot of people will be forced to downsize. Small spaces are slowly becoming the norm.

          • The Enlightened One

            Yeah, actually I am the same. I am totally not a tourist at all. I hate jumping around and just having a glance. I like living in a place and absorbing all the things the locals don’t want outsiders to see… that’s truly where the hear of the place is located and only that is worth the trip for me. But that takes time.

        • linette lee

          In New york, you can not rent anything less than usd$900 and it’s mostly a very small studio in a not so good neighborhood.

      • Dick Leigh

        Actually, in the UK (and in Canada) you do NOT own the land the house is built on. The Crown does, and basically, you’re just renting it. It’s almost impossible for private citizens to have true land ownership, it’s something reserved for governments. Especially in Canada, where something like 90% of the land is owned by the government. We have more in common with China than you think.

        • Kai

          Colloquially, the mode of “ownership” in the UK/CAN is more similar to the US than China, and I alluded to the fact that there is no “true land ownership” anywhere really in my previous comment.

          But as far as comparing the UK/CAN to China, I think most people would consider the difference to be significant and easily understood, with one major difference being that there is no explicit “time limit” for land use/occupancy rights in the UK/CAN whereas there are in China (even if what happens after the time limit is currently unknown).

        • Peter Wilton Cushing

          A knock on the door from the Queen herself, and one has to move out? I see what you are saying, but I think in a country with rule of law, you are safe from being evicted by the royals, they are just figureheads nowadays.

          • donscarletti

            “The Crown” or “The Queen” in the context of the law rarely mean the Queen as an actual person. It tends to refer to Queen in Council or Queen in Parlament, which are cute names for the executive and legislative branches of the government, which are in actual fact controlled by the very active and assertive national, provincial and state governments in the various commonwealth dominions. This is how they justify property taxation and eminent domain appropriations, which happen in the exact same way in the United States anyway.

            The Queen is of course able to hold property as an individual, but even that is subject to the crown, if that makes any sense.

    • Repatriated

      It blows my mind that people CAN pay the insanely inflated house prices. Last time I checked, the average salary in SH was something like 50k rmb/year for a working couple. Imagine trying to buy a 2mil rmb apartment! For that 2mil, you get an empty concrete apartment that needs another 200k to finish too!

      For the same amount of money, you can buy a pretty stellar house in most of the US, that’s sitting on a piece of property with a nice yard, garage, etc.

      • Peter Wilton Cushing

        Perhaps it is all the family money and mortgages and so on?

        • Repatriated

          I would hazard a guess that you’re correct. Some people even win the “apartment lottery”. By that, I mean they are given newer, more expensive apartments if they give up their old housing for development.

          • Peter Wilton Cushing

            True, then who you know and all that.

  • MrC

    yea, look what happend to HK after 100 years..

  • Zhongtanlu

    Those apartment buildings will never survive 70 years with the maintenance they are receiving (=none). My in laws live in an expensive high rise close to Shanghai central station, it’s not even 10 years old and it looks worse than a 50 year old european building. Never cleaned, never painted. Retarded construction (no thermal insulation, no heating except the airconditioners, single layer windows with gaps everywhere) But somehow the apartments in this deplorable p.o.s. building are now worth a fortune.

    • The Enlightened One

      Yeah, I noticed that too. However, the buildings being built in the past 3-4 years have better quality. I saw some built in 2008 and they still look new. Yet other look how you described. Depends on the construction company and it seems recently (due to higher competition moving into various cities) they are increasing the quality and maintenance measures.

    • TheSOP

      I’ve also noticed that the infrastructure in China seems to fall apart at a very fast rate. Transport is the scariest… how will that age? The hi-speed trains and all are great now but a decade down the line will they be safe? If half of the stories about sub-contracted sub-contractors using sub-standard building materials are true then it will be quite expensive to invest in bringing all this infrastructure up to code… alot of that money invested during the bubble economy years will have gone to waste.

    • Peter Wilton Cushing

      no thermal insulation, no heating except the airconditioners, single layer windows with gaps everywhere

      Yes, why is this. It THEN costs a bleeding small FORTUNE to keep the place heated!!!

      • The Enlightened One

        Another reason why I wasn’t sure about buying… Concrete is hot in the summer and cold in the winter… and the quality I have seen is crappy. However, the city I am in now relies more heavily on thermal heating from hot springs.

        Plus, construction companies are copying Western standards harder (at least where I live) and they have a HUGE project for beautification and being green friendly all over the area of this province. They are starting to get it right. In my city, the housing costs have went up like 250% in seven years.

        The place (xiao qu) I am buying in even doesn’t allow cars and motorcycles above ground around the community (unlike most places in China) because they say it isn’t safe and causes noise/air pollution and congests all the paths. So it is all underground parking with lifts to the flats. Seemed like a smart move.

        • Peter Wilton Cushing

          I’d wager you are in Xian or somewhere? North China does have good heating indoors.

          • The Enlightened One

            Your wager would be a good one. Haha.

          • Peter Wilton Cushing

            Indeed. All I CAN say in response to this, is, I HOPE your girlfriend or wife is not from that province. I HAVE had NOTHING but bad EXPERIENCES and I mean nothing but BAD with the young ladies from that HELLISH province. Cold, materialistic, uncaring, no, no, I will not go through THAT again….and they aren’t even as pretty as girls from other parts of China. Good luck my man, good luck.

          • The Enlightened One

            Haha, nope she is isn’t from that province. And actually, I am not quite in Xian but a few hours NE of it. The people of Shanxi are very kind actually. Shaanxi however… I am not too sure.

            I think you could have just had really bad experiences. Also, a lot of them are poor so their parents try to brainwash them… I lucked out and got a good one.

            I will tell you a story.

            I once went to this club in Xian and I was there with my girl friend, now my wife. There was a guy, and he was looking at me… I was thinking he had a problem. As it turns out, he comes and asks me in English. “Is that your girl friend?” I told him it was. He smiled, and told me to take the rest of his beer, which was like 5-10 bottles and left. Strange… I thought lol.

            Also, another time in the city where I am now. Some army dudes bought us (group of foreigners) all Heiniken beer. It was during that Japanese thing… and they were getting mouthy about the Japanese… they were like… “Yeah, Canada is good! Are you with us or the Japanese?!” I told them it is China’s problem and I prefer peace. I told them, I think the islands should belong to Taiwan anyway (which is the truth)… they seemed to like the answer enough to buy us beer haha.

            What happened to you?

          • Peter Wilton Cushing

            Fair enough, there are two different ones, is she from Shanxi, one A, if not, nothing so bad about the lasses from there. It is the ones from Shaanxi, two a’s you need to be careful of. You like heineken, good choice

          • David

            I was just visiting Xian this summer. Nice city, weird taxis but lots of great history (for a history teacher that is very important). Sounds like your place will be sweet.

  • 二奶头发

    Wait 70 years and find out… Lots can happen in 70 years. Now its 2013 70 years ago was 1943… lots has happened since then. 70 years from now (2083) who knows

    • Ruaraidh

      China will have moved on from building shitty blocks of flats on unstable land, to building shitty stamford toruses in the asteroid belt.

  • stevelaudig

    If you don’t pay real estate taxes in the U.S. every year, soon the government can take the home. There’s really not much difference. What do you care what happens to your home in 70 years? for most people their home in 70 years is a tomb and those leases are forever. for all the complaining about the Chinese government consider this: all net poverty reduction on the planet has happened in China in the last 30 years and “Among the permanent members of the UN Security Council, China is the only country that hasn’t had a war for over three decades.” China is now a ‘normal’ country with the problems a ‘normal’ country has. And consider, the government can’t ‘eat’ the house after seventy years and doesn’t want the house so it will have to sell the house, and at what price. It is easy [and exciting] to imagine horrible scenarios but boring is probably what will happen. who is going to want to pay much for a 70 year old property? the land may be very valuable but so what? It’s not like you did anything to increase the value, you just lived there..

    • mfriedma

      This is really silly.

      I’m 45. Let’s say I buy a 20 year old apartment now and I want to sell it when I am 70 to pay for old age care.

      Well, when I’m 70 there will only be 25 years left on the land use rights. Who will buy my apartment then? So using my apartment as a store of wealth looks rather impractical. So looks like I should just rent. If 0 residual value in 70 years is formalized what happens to housing prices today?

      Shanghai apartments today seem to sell for about 75* yearly rent. So rental return is about 1.3%. If you buy a new apartment for US$1MM, you assume 0 residual value in 70 years, and you want 3% return on your money above inflation what does that say about the increase in rental rates you expect over the next 70 years? Is that expected increase remotely reasonable?

      • Germandude

        Absolutely right. Also, don’t forget that Chinese don’t have many choices to invest money into and that “concrete gold” like houses and apartments are no.1 investment by families.

        Besides that, what stevelaudig fails to see is that houses and apartments, anywhere in the world, are the no.1 item to pass to the kids as inheritance. Now how is that a good thing to pass to your kid if it has to pay (who knows the price?) just to keep it?

        • Peter Wilton Cushing

          I wonder just how much real gold is stashed away. All those swish upmarket shops on des vouex road in Hong Kong seemed to speak mandarin along with english, wonder how much mainlanders buy, esp as rmb is stronger than HKD, and put away in wardrobes or under the floorboards and so on?

        • Kai

          I’m not sure if he “fails to see” that. I think he simply made a valid point that stands that wasn’t specifically addressing your specific concern. There can be no denial that the issue remains open-ended. That people are buying is both a gamble on faith in the government doing right by them when the time comes and ever-growing risk for the government if it doesn’t do right by them. The more the government allows people to purchase property, the more people it is beholden to and risk pissing off. Everyone who is buying a house is banking on (and yes, possibly deluding themselves) that the government stands to lose too much if it fucks property owners over. There’s also fears of this all being a massive government conspiracy to fleece the people of more wealth before the government absconds with it all, as some comments show. Heh.

      • Kai

        What you bring up is exactly why this 70 year thing is an issue and why there will be a lot of vested interest in finding a suitable solution that doesn’t massively screw over people and cause serious social unrest.

        If we knew for sure there would be no residual value after 70 years, then people wouldn’t be buying property or prices would be depressed from what they are. It’s a problem that we don’t know for sure. So people are definitely gambling here, because there is no clear answer yet. It’s gambling, but again, also an expression of faith and confidence.

        Here I think of property in Hong Kong pre- and post-Handover and what property owners or investors did at the time. I’m also humorously reminded of buying property in Taiwan, where there’s always a threat that China will takeover and render it all moot. Heh.

  • Cleo

    The government is going to say the land is undervalued to be somewhat affordable to some members of the citizenry and that it is below market rate that is being charged to purchase a long lease – its sort of like rent controlled but not as damaging to the government. I think they will prepare something for elderly owners – but they don’t really owe anyone anything. Most importantly, they have saved the land from carpetbaggers. It wouldn’t do for housewives engaging in yen carry trade to permanently hold blocks of Chinese land that the majority of the Chinese can yet afford.

  • Nessquick Choco

    I can see that, when the time of lease will come to end, the land-use right will be unselable, untransferable, as no one know what will really happen or how much have to pay. So it may lead to massive price drops, and than, again, speculators with right connections and informations, will collect the land …

    • Peter Wilton Cushing

      Do you like the cereal of the very same name?

      • Nessquick Choco

        yep, I do love them. but hard to get them here. More i Like the cinamon cini-minnies…

        • Peter Wilton Cushing

          Cinnamon is good. Auchan has a expensive but passable cereal selection if there is one where you are?

          • Nessquick Choco

            Thanks, I am in Shanghai. Some of the Carefour stores have some nice selection too. ;-)

          • Peter Wilton Cushing

            Not far at all. Shanghai should have a decent selection, given the amount of foreigners?

  • David

    When I first heard about this I also wondered why anybody would invest in something like this (especially a company). Then I was in China for a while and realized most buildings only last 15-20 years and decided it was much less of an issue. I am not kidding about this, even though the article says buildings are meant to last 30 years, I have seen buildings that are 10 years old but look like they were built in the 1950’s (and are in much worse shape then most buildings built after WW II. It also explains the constant construction going on; they just keep building, knocking them down and rebuilding.

    • Nessquick Choco

      so it means, keep economy running :-)

      • David

        I believe you have nailed it on the head.

  • loki


  • If one thinks about living in such places in 70 years, giving the way things are going, one should call oneself dumb, pretty dumb. Dumb Dumb. Dumb dee dumb dumb. Dumb.

    • Peter Wilton Cushing

      Agreed, and I would rather have the money for cheap chinese beer. To your health sir!

      • Well thank you Sir, I will raise my cup up high for you. I firmly believe this industrial revolution – unlimited resources based (biased) economy and society don’t correspond to the times we live in.

        • Warlock

          And me too sir, with some cheap chinese beer that I am easily able to afford, and would not want to live in South America, or North America, or the EUSSR or Australia for that matter. The Peoples Republic of Argentina is not for me, and the PRC suits me just fine. Cheers, salud, sir!

          • It is just “Republic” .. still a little far from being a people’s one. Though a lot of expats find it quite comfortable and decide to stay. I would have definitely stayed in China for the beer, having other foreigners talking openly and without prejudice, the safety and not having to worry about politics, but pollution drove me out… all in all I concur with everything you’ve said, except for that non-breathable air. Salud !

          • Warlock

            Oh the beer is the selling point for China indeed.

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  • David S.

    As stated by Chinese law, the government can revocate land use rights at any time if it is deemed to be in the “public interest”, so the 70 years deadline should be of least concern to home owners.

    At any rate, relocation and compensation of the modern Chinese middle-class is unlikely to work as well for the governement as with hutong dwellers and suburban farmers, and land property laws will be sacrificed to the altar of social harmony. Seeing how wound-up some people get over a scratch on their car, showing up at their door with a demolition notice wouldn’t be a good idea.

  • al in china

    The House won’t last 70 years in China…….ah the Heavenly Kingdom!

  • Why is anyone worried? Within 20 years China will be a vast wasteland of empty residential towers and crumbling factories. The bust that is coming will be ten times as greater than what happened in Japan 20 years ago. China is doomed. Just enjoy your temporary new middle class and shiny new apartments! Because the end is near China. India is coming, and you won’t be able to stop their progress. You will all be eating curry and wearing turbans. You will all be slaves working in Indian owned factories, as they will have come and bought up any surviving state owned factories after the downfall.
    … XD
    OK, just kidding. I love China. This land thing has always bothered me though. I still own part of an apartment in Guangzhou that my former girlfriend/ex fiancee and her mother live in. Some friends of mine have now gone to Thailand, as they recently changed their rule of land ownership, and can now be OWNED, even by foreign investors.
    I think to survive the future, China will not only have to guarantee ownership of land to the people, but also allow foreign investors to buy property, not just buildings.

  • al in china

    My property tax in Canada pays for roads, education, water, sewer, electricity and gas distribution as well as healthcare so I don mind paying $900.00 a year. But yes If the Queen wants my land they can expropriate it which is rare but I still don’t like it. No system is perfect.

  • susan

    My parents own property back in China, we have not been back in over 34 years, can we still reclaim the homes?

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