According to the IMF ’s house price-to-wage ratio, China has seven of the world’s top ten most expensive cities for residential property. All through the country's tier-one, tier-two, and even some tier-three cities, housing prices are severely out of proportion with the incomes of the people who live there.

However, the people of China can afford to buy these extremely expensive properties. In fact, 90% of families in the country own their home, giving China one of the highest home ownership rates in the world. What’s more is that 80% of these homes are owned outright, without mortgages or any other leans. On top of this, north of 20% of urban households own more than one home, according to Nomura. So with wages so out of whack with real estate prices, how can so many people afford to buy so many houses?

When we talk about how people afford houses in China today, more often than not we’re not talking about individuals going out and buying property on their own — as is the general modus operandi in the West. No, we’re talking about entire familial and friend networks who financially assist each other in the pursuit of housing.

Why there is so much liquid cash available for these relatively large down payments is straight forward: the Chinese are some of the best savers in the world. In fact, with a savings rate that equates to 50% of its GDP, China has the third highest such rate in the world.

Another way that Chinese home buyers are able to afford their down payments is via the country’s Housing Provident Fund... Part of this fund included a government initiated savings plan where employees are given the option to invest a portion of their monthly earnings and have it matched by their employer to assist them with buying a house.

Although we must remember here that China’s banks are fully owned by the Communist Party, and social stability often takes precedence over the raw pursuit of profit, so their lending practices cannot be compared like-for-like against those of Western banks.

According to a 2017 HSBC survey, 70% of Chinese millennials already own their own homes which is nearly double the global average. 91% of Chinese millennial non-owners also plan to buy a house in the next five years, according to the survey. By comparison, America has only a 35% home ownership rate among millennials and the UK has 31 percent.

Having significantly lower student debt also certainly helps