China's Families Abandon Real Estate for Financial Investments

Chinese families are increasingly turning away from real estate and towards financial investments as property's share of household assets drops to 52% in the first quarter of this year, down from 67% in mid-2021. At the same time, cash and bank deposits have risen to 25% from 16% in the same period.

According to a Goldman Sachs report released in June, China's household asset allocation is undergoing a structural shift as property's role in wealth accumulation fades and deposit rates remain low.

Yu, a Beijing homeowner, is considering selling her flat, valued at 2.1 million yuan ($310,260), which generates a modest monthly rent of 4,500 yuan - an annual yield of just 2.6%. She's worried about population decline concerns and potential declines in property prices over the next five years.

Mainland Chinese families are deliberately liquidating non-core properties to make their asset structures more balanced and diversified, with direct stock holdings among households rising to 6% this year from 5% in mid-2021. However, only a quarter of adults participate in the equity market.