Is Homeownership the Key to Life Satisfaction? Empirical Evidence from Urban China

• In Event: 1451 - Community and Urban Sociology Section Roundtables (1 hour)
  In Refereed Roundtable 60min: 9. Neighborhood Choice

Abstract

Owning one's house is considered as a fulfillment of the "Chinese dream" in China. With its transition from a predominantly public and subsidized housing regime to one of the most unaffordable countries according to the price-to-income ratios, China is an interesting case to study the relationship between homeownership and wellbeing. The over-heated housing market and the rapidly soaring house prices have been increasing the concerns for property bubble, and impacting the subjective wellbeing of the population. Yet, people are still spending their savings on purchasing homes. The question is: Does property right really matter to people’s well-being? To what extent can a property owner improve his or her wellbeing?

To explore the real estate fever, this paper examines the association between house ownership, type of property rights, and subjective well-being in China using 2012 wave of the Chinese General Social Survey (CGSS). The result of ordered logit models showed that full/partial owners were less happy than people living in low-cost housing including dwellers of public housing, those living in dormitories allocated by a state-owned enterprise. Meanwhile, full homeownership contributes to homeowners’ happiness only to whom that expects housing prices to increase. However, no significant associations were found among home loan and mortgage payment on individuals’ life satisfaction.

This indicates that owning a home might not make you happier, but living in an affordable house, and low-cost housing will. Also, Chinese homeowners who expect housing prices to increase were more satisfied with their lives. Accordingly, the cultural preferences of Chinese home buyers can be associated with their economic well-being such as the sense of financial stability and security. Therefore, it is no surprise that homeownership is the main engine of wealth inequality which affects the overall happiness of individuals in China.

Author

• Wenhua Lai, Michigan State University