Real Estate Industry in the National Economy: History, Present and Future

The real estate industry has a long history in China and the industry in the modern age originated in Shanghai. After Shanghai opened its port in 1843, it gradually became the national center of foreign trade and the most important industrial manufacturing center. With the signing and revision of The Shanghai Land Regulations, foreigners controlled concessions in Shanghai in the form of perpetual leasing, and the title deed system (the basic land tenure system in Shanghai concessions, which was a private property right registration system) created the condition for foreigners to engage in real estate and paved the way for China’s modern real estate industry and evolve to become the earliest professional real estate market in China. During the rebellion of Xiaodaohui (Small Swords Society) and Taiping Heavenly Kingdom (1851–1864), a lot of refugees and rich officials and merchants from Jiangsu and Zhejiang Provinces took shelter in the concessions, which led to the sharp rise of land price and rampant real estate speculation. It wasn’t until the 1870s that real estate trade “was no longer speculative as in the wartime and a more standardized real estate market began to appear in Shanghai” (Lu Hanchao, 2004). Housing on lanes and alleys also “flourished around 1870 and kept expanding to all corners of Shanghai”. “They could generate 30–40% profits either leased or sold, which was more profitable and much safer than shipping goods overseas. Therefore, both foreign and Chinese merchants were eager to buy land and construct buildings on a large scale (Zhu Jiancheng, 1990). After that, modern real estate market began to mature in major cities.