Home mortgage slave

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Home mortgage slave (Chinese: 房奴; pinyin: fángnú), literally “the slave of the home mortgage”, refers to those people who pay a huge amount of mortgage loans (above 70% of their disposable income), which negatively affects their social lives. Mortgage slaves work to pay the mortgage loans, which are said to enslave them.


Because most of the disposable income is spent on the mortgage loan, mortgage slaves’ budget on the consumption and investment is extremely tight. This leads to the impoverishment of their social lives, which has drastically decreased their living standard and fettered their comprehensive personal development.

Causes for skyrocketing housing price[edit]

1. Urbanization leads to the huge demand for housing. The export-oriented economy attracts a large amount of labor force from rural to urban areas. The fast expansion of higher education also leads to the large inflow of intellectuals to cities by offering education opportunities. The geographically uneven distribution of social resources makes only a few cities the ideal destinations for population migration, which has further increased the demand for housing in some of metropolises.

2. The negative effect on the free migration of population caused by household registration system] (Hukou). The outdated household registration system has drastically hampered the migration of population and the development of society. It limits the newcomers on sharing a variety of social public goods offered by municipal government, which instigates their desire for housing in the hope that they could be treated as local residents by purchasing real estate.

3. The unsound social safety net. People’s uncertain expectation of the future makes them resort to the real estate property as the “last straw” for their pension.

4. Traditional concept rooted in Chinese culture. People regard the ownership of the real estate to be the prerequisite for long term inhabitation.

5. The inaction of government on the housing guarantee program. The real estate industry is pushing up GDP figure which is the core evaluation criteria for promoting officials. This inborn defect in the political system leads to the inadequacy of low-rent housing and economically affordable housing programs.

6. The real estate companies, banding with banks and governments, taking advantage of people’s rigid demand[1] for housing, speculate on real estate market and harvest a large amount of wealth.

7. Most of the prior-urbanized residents, after accumulating a sizable amount of wealth, have also speculated on real estate market due to the lack of other investment channels in China’s financial market. They have unknowingly become the accomplices of the real estate companies, contributed the skyrocketing of housing price. The people who eventually “pay the bills” are those who are in the progression of urbanization. In simple words, in the unprecedented and sensational progression of Chinese society urbanization, “the early wealthy” mentioned by Xiaoping Deng have not helped others to “reach collective wealthy”. On the contrary, by manipulating real estate as an effective tool, they have exploited a significant amount of “urbanization tax” from those who are undergoing urbanization.


In the NPC and CPPCC session 2010,[2] housing issue has become one of the mostly discussed topics. A number of regulations have been or will be rolled out. Some of them are aimed at curbing the housing price such as: increasing the down payment of land grant fee[3] for the real estate companies; increasing the down payment of those who purchase the second real estate property; increasing the interest rate[4] to curb the excessive speculation on real estate market, etc. Some of them involve the strategic planning on the fundamental well-being[5][6] of the entire Chinese people such as: the overall social security system encompassing both rural and urban residents;[7] adjusting the income distribution by tax leverage; the transformation of economic development model,[8] etc. The housing price is hopefully to be curbed by the upcoming regulations.