Bleak outlook for the generation of 20- and 30-somethings

Vice has this crazy read about the current generation of British 20- and 3o-somethings, who just don’t and can’t stop partying and living like teenagers. Basically, for many of these people, life has gotten comfortable enough to the extent that people don’t have any meaningful purpose due to a lack of significant responsibilities like marriage, parenting and owning a home that our parents went through at the same age. As a result, a lot of people spent a lot of time partying and getting drunk and wasted, in other words, living like they did as teenagers and university students.

But it’s not all their fault because decent jobs are scarce while home prices have risen so much that most working- and middle-class young folks find it hard to buy their own home. I’m not British, and neither does my life resemble the worst parts of the article, but I can feel some sympathy. The problem is especially bad in London where a lot of “endies” – employed with no disposable income or savings – struggle to save money, especially to buy a home. Though one could wonder why young people in other parts of the Western world like the US, Canada or say, Western Europe aren’t engaging in the same kind of drunken antics frequently as well, despite facing similar problems of skyrocketing home prices, comfortable lives, and delayed marriages and birth rates.

The problems, socially though not behaviorally, exist in East Asia too, specifically Hong Kong and Taiwan with regards to the low levels of marriage (which includes myself as I’m single), births, and home ownership due to skyrocketing home prices. Japan also has this problem, and back in 2012, I came upon an FT article that described this problem with young people’s lack of ambition and chances.
In HK, the problem is especially acute because home prices are among the, if not the highest in the world and many of these homes are so tiny (and these aren’t even cheap). Affordable and public housing is sparse and a significant number of new developments are luxury apartments. A lot of young people are living with their parents, even young married couples working decent jobs like the couple mentioned in this article, incidentally about HKers escaping rising home prices by immigrating to Taiwan.

Yet home prices in Taiwan are not cheap for young Taiwanese either. The problem is especially serious in Taipei where rising home prices mean many young, middle-class people can’t afford homes and have been forced to rent or move out to surrounding areas. The recent local election saw the ruling KMT lose municipalities across Taiwan including Taipei due to problems like inequality and out-of-reach home prices (and what many perceive as a focus on boosting China economic ties that only benefit local tycoons while unable to benefit most people).
Incidentally I missed this news way back in August, but it’s an interesting development that mainlanders have been buying homes and property in Taiwan since 2002, mainly through Taiwanese middlemen or shell corporations set up in other places like Hong Kong. Hell, there’s even an apartment project in Tamsui that was built by a mainland developer (through its Singapore associate company). Allowing more mainland buyers in Taiwan to buy homes would also push prices up, or rather push developers to build more luxury apartments like Hong Kong, since these mainland buyers are mostly wealthy.

In Toronto, the biggest city in Canada, things are tough too when it comes to buying apartments (condominiums). So tough that for many 30-something couples, the main way they’re able to afford homes is the “Bank of Mom and Dad” – money from parents.
Frankly, this could be applied to Hong Kong, Taiwan and China. While I’ve yet to see articles that explicitly state this, I know from talking to people and family that many parents in East Asia pay for their children’s homes or at least pay off the deposit.

At the same time, it’s not as if young people can be spared all blame. There are other factors too such as that with the development of technology and materialism, there are so much more things to spend money on such as vacations, electronic devices and services. And as such, it’s harder to save up money and most young people don’t develop this habit.
In some countries like the US, this is exacerbated by a situation where things like say, health care and tuition are getting higher while clothes and electronic devices like TVs and computers are getting cheaper.
The problem is less so in East Asia, especially in Taiwan where health insurance is nationwide and extremely affordable.

This trend of home prices rising way beyond the reach of young, educated workers seems to be prevalent across the world, from the UK to Canada to East Asia to even China. And while it hardly gets mentioned, I’m certain housing markets and economies face a looming crisis down the road as societies age, birthrates drop, and 20- and 30-somethings are unable to continue buying homes at the same rate as their parents and grandparents.

Hopefully the future will not be as bleak for current 20- and 30-somethings in Asia like how the Vice article suggests it is in the UK.

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10 thoughts on “Bleak outlook for the generation of 20- and 30-somethings

  1. The question is, does everybody need to buy an apartment?

    My boyfriend just bought an apartment in Suzhou. He is Chinese so he thinks he needs to own an apartment or he wouldn’t be manly enough. I have always been very wary of buying real state as I don’t like buying things I can’t pay for immediately, and, given the prices, I would need to save for many many years to afford a flat in China. It might seem an unrealistic way of thinking but hey, lots of people have lost their homes after the crisis in 2008 in Spain, when they couldn’t pay the mortgage and the bank took their flats…

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    1. Hey Marta, thanks for the comments. The answer, in my opinion, is no, absolutely not. It’s not unrealistic at all to not buy an apartment or house, especially if one doesn’t plan to stay in one place forever. From a financial perspective, ownership does not always work out to be better than renting. I mean I get the benefits of owning one’s own home but the prices of homes, whether it be in the mainland, Hong Kong, Taipei or other big cities, are just too preposterous. I rent, by the way.

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      1. I am totally pro-renting! I think renting should be promoted, and not encouraging people to buy. But then, at least in China, people would also need to be educated on how to care for rented apartments… I have seen horrific things, haha. It seems they think “this is not my house so I don’t give a crap, I will completely destroy it”…

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        1. Yes, renting is good and I find it strange and amusing that there’s a taboo against renting in East Asia.
          I remember, before when I was looking around for a place, one landlord told me how his place had been vandalized by a previous tenant.
          However sometimes landlords don’t maintain apartments well. My current one is decent, but has issues with the plumbing and balcony. This being China, I guess there’s a lot of blame on both sides.

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  2. The other day I was looking at the prices in a Shanghai real state agency. The cheapest was 4,600,000 Rmb. It was in the center, but still, that is very expensive for an old 82 m2 apartment in a not so pretty compound. I really don’t understand how Chinese people can afford it…

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    1. Yes, prices of homes in the big cities are just too ridiculous. 4,600,000 RMB works out to over US$750,000 and you’re right, an old, small apartment is just not worth that. I don’t understand how many Chinese people can afford these homes either since middle-class salaries aren’t that high (RMB6,000 is considered decent in Beijing and Shanghai right?), so I think that money from parents and relatives is probably a big factor.

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      1. Mmmm I don’t know if 6000 is considered decent anymore, the department managers in my old job in Suzhou (mid size manufacturing plant, the managers I am referring were the ones in the office, so admin, logistics, HR, etc, not the technical managers) earned around 8000. I don’t think a person can survive with 6000 in Shanghai, unless he shares a room (bunk beds style)…

        I think you are right, when 20 something guys buy an apartment, at least the front payment comes from the parents… how would the kids have that kind of money if they just started working?

        I also hate the mentality of “if a guy doesn’t own a house he won’t be able to get married”. Chinese women are causing the real state bubble!! 😀 And it is so unfair for guys…

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        1. That’s true – 6000 is too little to be decent. Even with a salary of 8,000 or 10,000, it’d be hard to save up to buy an apartments. I was told that you can’t get a place in Beijing for less than 2 million RMB, and even then it might be just a studio, not even a one-bedroom apartment with a living room.

          Haha, indeed, women may be partly responsible for the real estate bubble. I hate that mentality as well. It’s just so materialistic and kind of reduces marriage to materialistic objectives. I’ve heard it’s very widespread in Shanghai and Beijing, and I wonder whether it applies to across China. In a society with more reasonable housing prices, I’d be more sympathetic. Interestingly, that is not such a strong requirement for getting married in wealthier societies like Hong Kong, Taiwan and Japan.

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  3. I can understand how people prefer buying an apartment in China to renting one. I can’t count how often I had to move in my years living in China because the owner of the apt decided to move back into the flat or whatever. I think my record was 4 times a year. Buying an apartment is often not cheaper than renting one in China if you sum it up, but it will give you some peace of mind. Apartments in Shenzhen, where I lived in the past, are almost the same price as those in Vienna, which is crazy considering the difference in income.

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    1. OK, peace of mind is a good point. If I was a local, I’d probably feel similar.
      I also had to move earlier this year in Beijing after a few months because the owner suddenly showed up and decided to sell it (the crooked agency which I leased the apartment from were even more irritated and extorted money from her for that).
      It’s weird how home prices are so high in big cities here that they’re almost the same as much more wealthier and developed places. Especially when you consider that there is no home shortage or that many new homes are empty as they’re second or third homes. I think this might be a bubble that may be slowly deflating, if not popping immediately.

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