The Secret Factor in China's Housing Bubble? Mistresses
The practice of buying apartments for lovers—common among wealthy men—may have serious consequences for China's economy.
Keeping a mistress is a normal part of life for successful Chinese businessmen and government officials, and in some ways they have become more visible in recent years, playing roles in corruption scandals and even, sometimes, turning in their lovers.
They and their big-spending partners may also be contributing to ever-increasing real estate prices in some of China’s biggest cities. That’s because these women, often from rural areas, are regularly kept in apartments that their lovers buy for them in urban centers, near his work or home. The practice has created entire neighborhoods of apartments in big Chinese cities filled with women who would otherwise be living at home with their families, or perhaps sharing a rental.
In a colorful article today London-based magazine Aeon, one “ernai” or “second woman” living in a $400,000 Beijing apartment explains:
Local estate agents target provincial officials and businessmen looking to put their money into Beijing’s property bubble, and the men fill up the apartments, bought as investments, with their women. “Half of the apartments are empty,” she explained. “And the other half are full of girls.”
Quantifying how many apartments there are housing mistresses in China is close to impossible, but the practice of having, and “keeping” a mistress is widespread among the wealthy. About 90 percent of the top officials brought down by corruption scandals had mistresses, a government report from 2007 found. One had 18, it suggested. “Keeping a mistress is just like playing golf,” one real estate developer, who spent $6,100 a month to support a 20-year-old art major, told The New York Times in 2011. “Both are expensive hobbies.”
The state-run Beijing Evening Daily estimated back in 2010 that there were 200,000 mistresses living in apartments in Beijing alone, and said that if they could be driven out of the city as part of an on-going prostitution drive, there would be a “turning point” in housing prices there.
Since then, home prices have only gone way, way up.