This is a long, wonky, data-driven, meandering thread about real estate & median lifestyles & home affordability in China. I see a people discussing Chinese homes and wages and affordability on here think about it in a kinda one-dimensional way, and I hope this adds context. 🧵

First,when you chat to people in China, talking about real estate is like discussing the weather. Every adult will talk about it, and everyone, no matter who or where they are, says it's expensive. That's been the case for the entire time I've lived here.

But when for affordability, context is key. What part of the country? And what part of the city are we talking about? And of course...wages matter a lot for affordability, and they vary a lot across cities and districts. Chinese cities are more like administrative

Let's start our analysis all the way at the top. Here's district-level data for Beijing's secondhand real esate market from March 2023. It's a little outdated, of course but the point here is to emphasize the variation in the same city. I'll use this same data series throughout

With a median monthly wage in Beijing of ~12.3k, Beijing's downtown and rural districts alike are far out of reach for median wage earners. A 100 sqm apartment would cost more than 10.5M CNY in downtown Haidian (near Peking University). That's nearly 1.5M USD. Just the down

Shanghai (1) and Shenzhen (2) are very similar: very expensive downtowns, with a halo of increasingly-distant suburbs that are progressively more affordable, but only in a relative sense. Guangzhou (3) stands out among 1st-Tier Cities; its downtown areas cost much less than the

So, as a very broad summary, we can obverse the 4 1st-tier cities have: 1. Very expensive downtown districts 2. Near-downtown districts that cost about 1/2 the downtown areas (and a 30 minute commute) 3. Suburban districts that cost ~1/3 the downtown areas or less (and a 1hr+

Next, these rules hold up for a few of the wealthiest "New 1st Tier" cities as well. Their downtowns may cost about half as much as 1st Tiers, but the 2:1 and 3:1 ratios I described for near-downtown and suburban hold up pretty well. Here's Hangzhou (left) and Suzhou (right).

On an affordability basis, these cities are better off than the OG 1st Tiers like Shanghai and Beijing, but still very expensive. Their median wages are a little lower and their downtown real estate costs half as much. So if you wanna buy a 100 sqm apartment in Binjiang

But the real gems start to arise in the latter half the "New 1st Tiers" - the ones that are developed enough to be in this tier, but don't have the super expensive downtowns, places like Chengdu, Chongqing, Xi'an, etc. These places have a different ruleset from the cities I just

Wuhan has a median salary slightly lower than Hangzhou (8.4k). Wuhan is a developed, modern city. Its downtown real estate is only half the cost of Hangzhou's. A 100 sqm apartment in Wuchang District will cost 2.7M CNY. The down payment is 950k, or 112x the median monthly wage.

Chengdu is even better. Its real estate prices have always been more affordable than peer cities, and its median wages are even better than Hangzhou's at 9.8k/month. No wonder Chengdu has been such a popular destination in recent years.

Now this is not to say that these are SO affordable for median wage earners. It's still tough. It still requires 2 income-earners, years of savings, support from family. But you can envision a path to urban home ownership for the upper 50% of the wage-earning population...

Thanks for staying with me so far. This is where it gets interesting. What's next? 2nd Tiers. 3rd Tiers. And lower... If you sum the population of all the 1st and "New 1st" Tiers, their combined population is...just 1/5th of China.

NONE of the cities I've mentioned so far are relevant to most people, because most of the population isn't from there and will never consider buying property there. The median Chinese citizen lives in a 3rd/4th tier city somewhere. Let's find one.

Behold! Henan's Zhoukou City! (this was a totally random selection from my map on the wall) With a total administrative population of 8.6M people but a core metro population of just 1.6M, Zhoukou is a classic example of how many Chinese cities are best thought of as

Zhoukou's urbanization rate is just 45%, which is means it has a LOT of rural citizens that would probably like to own an urban home someday. Unfortunately, Zhoukou isn't a particularly wealthy place, with a median monthly wage of just 4k CNY. Henan is ranked #6 by provincial

Well, it turns out that real estate everywhere in Zhoukou...no matter whether downtown or in the suburbs, avgs about the same: ~5.5k CNY/sqm. So a 100 sqm apartment here costs just 550k CNY. A down payment will be 192k, or just 48x the median monthly salary. That's doable...

It should be no surprise that a ton of the taxi drivers I meet and write about in Shanghai are from places like Zhoukou. They're trying to speedrun the system. They bust their ass here for a few years, working horrible 16-hour days so they can make 12k a month, never seeing

Is Zhoukou nice? Is it worth all that? I don't know. I've never been. But I think it's plenty attractive to rural residents of Henan looking to make their first urban relocation so their kids have access to better schools and their parents have access to better hospitals. I bet

Anyway, THESE are the considerations you should have when you think about Chinese wages and cities and real estate and affordability. ...not what people in Shanghai or Beijing already owning a statistical average of 3.6 houses think about house values... ....and not whether

All the charts on here came from the same website here: . - The Anjuke data was assembled last year. In reality, prices in most of these markets will be lower now, some significantly so. - Median wages were Baidu. Your search results may vary... -End

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