Odd Lots How Chinese Real Estate Became the Biggest Bubble in History
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Nov 10, 2025 
Mike Bird, Wall Street editor at The Economist and author of The Land Trap, dives into the intricate world of China's real estate. He reveals how housing has become a primary savings tool for many Chinese families and the role of land leasing in fueling urbanization. Bird discusses the challenges of affordability amid wealth creation, local governments' dependence on land sales, and efforts to cool the real estate market. He also critiques land-driven economic models and explores potential reforms.
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Leasehold Dominates Hong Kong Housing
- In Hong Kong you buy the apartment but not the land; developers buy long leases from the government.
- Buyers hold usage rights for fixed terms like 75 or 99 years rather than perpetual ownership.
Land Leasing Fueled China's Urban Boom
- China adopted a Hong Kong‑style land leasing model starting in the late 1980s to raise cash from land use rights.
- Local auctions and leases became a key revenue source for urban development and government finance.
Housing Became China's Main Savings Outlet
- Financial repression pushed Chinese savers toward property because bank and equity returns were poor.
- Housing became the dominant household savings vehicle, creating huge demand and speculative purchases.
