Hitting Home : Chinese Delegation Marvels at Spacious U.S. Housing

The delegation from China’s Ministry of Construction strolled through the model homes in Huntington Beach, knocking on walls, peering inside cabinets and generally soaking up all the amenities of the upscale Southern California development.

Their unanimous verdict: Americans “have a very good standard of living.”

The pricey, spacious homes provided a stark contrast to the multistory condominium developments in the suburbs of Beijing or Shanghai, where families pay an average of $24,000 for homes of around 600 square feet, and such amenities as fireplaces and three-car garages are unheard of.

“This is like real estate Disneyland,” quipped Redondo Beach real estate agent Jim Hamilton, as members of the touring delegation snapped photos of each other reclining in bed reading or trying on straw hats that decorated a bedroom wall in the 3,500-square-foot homes, which have price tags ranging from $600,000 to $700,000.

The recent tour was part of a daylong conference set up by Southern California real estate officials to provide a primer on the capitalist world of U.S. real estate.

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Some members of the Chinese group chuckled with disbelief when Realtors told them that a home here could be purchased with only 5% or 10% down, and that Americans can take up to 30 years to pay off their home loans. In China, buyers in urban areas typically put up to 60% down and pay off the balance in five to 10 years, said Dong Shaotong, director of the China Real Estate Assn., the Chinese equivalent of the industry trade group National Assn. of Realtors.

Indeed, owning real estate is a relatively new phenomenon in China. Currently only 30% of the population owns a home. The rest rent apartments from the government, which charges them only 3% of their monthly income. These low rents have given people little incentive to buy. And even when they do, they don’t get title to the land, which is leased from the central government.

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“They are about 50 years behind where we are in trying to start up a private real estate industry,” said Pat Neal, a Huntington Beach-based Realtor who hosted the group.

But officials say the government is considering reducing subsidies for rental housing to encourage more home ownership. The government also provides its workers with financial aid to buy homes.

“The goal is to increase home ownership by 15% in 10 years,” Dong said through a translator.

This housing market provides huge opportunities for foreign investors, who are developing most of the residential projects through joint ventures. About 21.5 billion square feet of housing is built and sold there each year, officials said.

Still, owning a home in China doesn’t take the same priority as in the U.S.

While Americans generally equate success with owning a nice home, the top priority in China is living in a good neighborhood, regardless of whether the home is owned or rented, according to a study done by Chicago-based ad agency Leo Burnett Co.

The Chinese delegation also has scheduled similar excursions in New York, Washington D.C., San Francisco and Honolulu.