[seanmcdirmid]

A couple of things:

1. Everyone expects the leases to be renewed easily and cheaply. There was a huge scandal in Wenzhou when some shorter 30 year leases weren’t going to be renewed cheaply, the central government had to step in to keep up the appearances that the leases were merely a formality.

2. China doesn’t (mostly yet) have property tax. Normal automatic deprecation on property through taxes doesn’t apply.

Now who knows what will happen when a property tax is inevitably introduced...

[freewilly1040]

Both points seem to point to real estate being a bad investment?

1) local governments have already been to tempted to squeeze revenue out of lease renewals, who knows what they’ll do in the future

2) a property tax is inevitable and unknown...

[seanmcdirmid]

True, but the main reason property is a bad bet is a way too huge property bubble. Urbanizing farmers aren’t going to save the day and pay you $1 million for your extra 75 sqm apartment.

[baybal2]

In Shenzhen, the municipality has no issues expropriating land rights of 20 year lease holders.

One my coworker ran into a situation with his landlord:

1. He gets a call from his family "Police knocking on the door, they have an eviction notice"

2. Guy angrily calls the landlord

3. Landlord say WTF and rushes to the scene

4. It was later realised that his flat, that was bought and sold god knows how many times, had its lease expired, and the landlord was not even aware of him having to extend it.

5. He had to relocate his family overnight to friends and coworkers