There was a lot of spirited discussion about owning a house in the comment thread of my post on equities, gold, and real estate, and it also reminded me that the real estate sector in India is nowhere as hot as it is in China.
I feel that way due to mostly anecdotal evidence and the many weird real estate related stories that come out of China periodically.
The last one I read was about a phenomenon described as naked marriage or luohun. Now before you say there better be pictures, be advised that it has nothing to do with clothes!
Naked marriage is a term given to marriages in China that are done without spending much on the occasion itself, and before the guy owns a house, a car, or has a big bank balance.
In fact the story I linked to describes one couple whose only expense on marriage was 100 yuan which was the cost of a small dinner party.
Naked marriages are a response to rising real estate prices, and high cost of living in the cities, that’s making it difficult for Chinese couples to own a lot of assets before they get married and apparently they are becoming left – over singles.
There is even a TV show on the phenomenon called The Era of Naked Marriages, and that seemed to have struck a real chord with people because the first episode topped all ratings.
Another TV show which became quite popular in 2009 was “Wo Ju” which literally translates to Snail House.
The show was about a young couple trying to find affordable housing in China, and the story is actually quite emotional, with the couple finding it hard to buy a house with prices skyrocketing, and the wife’s younger sister coming to live with them who then gets involved with a government official who helps them with money to buy the house.
It’s incredible that a TV show about housing prices became so popular, but what truly amazed me was the fact that the government canceled the TV show! Imagine that!
How close does it have to be to reality for the government to get so unsettled as to cancel a TV show?
And of course, there was a jaw – dropping story I read in Time about a person who drives a taxi (must be his own) and was going to buy a house worth $735,000!
The government gave him some compensation for his house 8 years ago when they acquired it for redevelopment, and since then he has managed to own 3 apartments.
There is of course a lot written about the Chinese real estate bubble, and most of it is data driven like the estimate about 64 million empty apartments in the country, and I have been reading these type of things for quite long now so who knows when it will pop, but it sure looks like a familiar story.
I don’t think Indian real estate sector is anywhere close to this kind of over heating, but who knows, we might be headed that way as well.