The point of ownership

Last year, almost exactly a year ago, I blogged about how I was not sure of the motivation to own property in China. It's still a subject that comes up from time to time with us and our friends. For us, we may never be able to justify to ourselves signing onto a mortgage that costs significantly more than rent for an apartment. Not a house, but an apartment.

One of Randy's co-workers, Mr. H, is currently also having some difficulty explaining to his family back home his reluctance to jump into property ownership. He's a little younger than I am and married with a seven-year-old daughter. He still rents an apartment. Back home in Inner Mongolia, his two brothers have already purchased more than one apartment each. His parents and brothers are perplexed by unwillingness to join their ranks as even an owner of one apartment.

More rambling after the jump



Mr. H has explained his various reasons for not wanting to own any property yet. He has never yet been motivated to buy an apartment in any place where he has worked because he does not feel as though his family is settled yet. Already in his career he has moved from Shenzhen to Beijing, a huge relocation that he was easily able to undertake without looking back because he was not tied to an apartment. He is very happy in his position here in Changping, but he also knows that this will not last forever. Neither he nor his wife are from Beijing, so they do not feel the pull to put down roots here. The biggest advantage to owning an apartment in the same area where he works would be to assure admission to a proper public school. They've been able to manage getting their daughter enrolled in a Changping school without that anyway.

The other obvious locations to look for property would be one of their hometowns. His wife is from Shandong province, and in the region where she was raised there aren't a lot of opportunities for a mechanical engineer with his background, or at least, something better than what he is doing in Changping.

For Mr. H, too, his Inner Mongolia hometown makes even less sense. As he explains it, when he was a child, every village in his county had its own primary school. That has changed in the past twenty years. Between the declining birthrates and the families that have left the villages for cities like nearby Baotou, the smaller villages can no longer support their own primary school. There is now a central primary school to which several villages send their children. It is too far for a daily commute for the children from the other villages, so they have to stay during the week. The school cannot accommodate boarders, so the children and one caretaker (usually a mother, though sometimes a grandmother) rent out a room near the school. This has wreaked havoc on the local economies. The villages that no longer host a primary school are ghost towns during the week, and the local businesses are suffering. Meanwhile, the village with the school is doing far better financially. Residents there are enjoying the windfall, as they are feeding and housing weekday tenants.

Randy's co-worker's hometown is, unfortunately, not the village that gets the school. If Mr. H purchased an apartment there now, they would have difficulty finding renters or a buyer should they ever need to sell it. Anyone with a child would still have to find a place to stay in the school's village. And the real estate in the village with the school is unreasonably high because of the school. To pay that much and still have to live in an unfamiliar village in rural Inner Mongolia also is not drawing Mr. H into home ownership.

So, much against the family prodding and the cultural currents, Mr. H continues to rent and keep his options open. Maybe home ownership is in their future, maybe it isn't. Right now he just does not see the point in pursuing it anywhere in China.