Sep 27, 2022

The South China Morning Post offers up an interesting perspective on China’s collapsing housing markets—while the immediate financial woes may be catalyzed by the pernicious unforeseen consequences of Xi Jinping’s “Three Red Lines”, the markets may have already been poised for a downturn, due to a steep decline in the number of marriages taking place.

But marriages plunged to a record low of 7.6 million last year, roughly half of the peak of 13.5 million in 2013. That year, 1.3 billion square metres of new residential properties – roughly 13 million flats – were sold, household debt was low at 16.6 trillion yuan (US$2.4 trillion), and grandparents were rich in savings. By last year, household debt had ballooned to 71.1 trillion yuan, over 140 per cent of disposable household income, and the grandparents had been bled dry.

For young Chinese men, marriage eligibility essentially entails property ownership. The societal pressure to marry has in turn fueled a considerable amount of household debt, which has become especially burdensome now that real estate markets are in recession, and property prices (which is to say, market valuations) are declining.

But the property market has not been kind to Mai’s investments, whose combined value has plunged by nearly a fifth – from 8.5 million yuan to 7 million yuan – as the market has floundered.
Situations like Mai’s are more common than some may realise, and they serve as a warning sign of mounting debt risks among middle-income and working-class households in the world’s second-largest economy.

While Beijing can order local governments to stimulate housing construction and bail out developers, and can impose leverage limits under the “Three Red Lines” mantra, what Beijing cannot do is command young men and young women to marry. Not when there are 35 million more Chinese men than Chinese women.

The official numbers show China has 723.34 million men and 688.44 million women, accounting for 51.24 percent and 48.76 percent of the population, respectively. It means there are 34.9 million more men than women, said the bureau's spokesperson Fu Linghui, who called the phenomenon the current "reality."

If young Chinese adults are tending to eschew or postpone marriage, the housing markets are likely facing a lengthy—meaning “years”, not “months”—recession and decline. How Beijing stimulates out of that conundrum is as yet a mystery.

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