Real estate investment in China and Taiwan from the perspective of the crypto world: Is it better to rent or buy?

In the crypto world, capital efficiency and opportunity cost outweigh everything, which has led more and more people to begin re-evaluating the traditional notion that "buying a house equals investment." For some seasoned players in the crypto world, buying a house is no longer the financial endpoint in life, but may instead become the biggest trap in asset allocation. When the Chinese housing market faces structural risks, approaching it from an encryption perspective might help us see the truth.

The effectiveness of capital is king: Is buying a house becoming a "pseudo-demand"?

Encryption OG @yuyue_chris shares that after entering the encryption field, his perspective on asset management has completely changed, and he has developed a pursuit for opportunity costs and optimal capital allocation. He believes that before assets are sufficiently accumulated, buying a house is fundamentally a "pseudo-demand."

For example, taking a property valued at 10 million RMB, if calculated at an annual interest rate of 4% on US bonds, it equals a potential loss of 400,000 yuan in interest each year, which totals up to 4 million yuan over ten years. In contrast, renting a property of the same value only costs about 10,000 yuan per month, amounting to a total expenditure of about 1.2 million yuan over ten years. In terms of capital efficiency, renting is far superior to purchasing, and it does not sacrifice liquidity and future options.

If there are no rigid needs such as childbirth, modern people can live a comfortable life based on renting, and should not be bound by the traditional concept that "buying a house is a life goal."

Is it a house or debt that you're buying? The leverage illusion in the Chinese housing market.

The encryption KOL, Wei Tuo, approaches the issue from a more macro institutional perspective, criticizing that China's real estate is essentially a financial illusion woven by the government, banks, and real estate developers. He points out that the profits of property enterprises are devoured by a 45% land value increment tax, and coupled with the costs of bank loans, the actual profit margins often drop to single digits.

However, real estate developers continue to rush in one after another, as they can rely on financing to leverage their investments:

The entire system relies on stabilizing the prices of commercial and second-hand housing, which is essentially a split market where "a small horse pulls a big cart." When the end housing prices can no longer hold up, even first-tier hot areas like Linglong Bay in Suzhou or Zhangjiang in Shanghai have seen prices halved or significantly drop, putting the entire real estate market in a precarious situation.

Unlimited Liability Loans: China's Unique Financial Hell

In his eyes, what homebuyers actually purchase is 90% of the local debt plus 10% of the construction costs. China's mortgage loans also contain a globally rare "infinite liability" clause. Even if housing prices plummet and properties are foreclosed, the remaining debt must still be repaid by the individual, otherwise they will be classified as a "dishonest person," severely affecting their future employment and life.

In contrast, many countries such as the United States, Australia, and Canada adopt "limited liability loans". Once the property value cannot cover the loan, borrowers can choose to hand over the house to minimize losses, with the maximum loss limited to the property itself. This also makes Chinese homebuyers more vulnerable financial hostages during economic downturns.

MSCI data reveals: China's housing market has entered a long-term bear market

According to the latest report from MSCI on the "MSCI China A Real Estate Index", China's real estate stocks have performed poorly overall since 2016, with an annualized return of -8.8% as of May 2025, and a maximum five-year decline of 73%. The index includes six major real estate companies, including Vanke, China Resources, and Poly.

The report pointed out that between 2020 and 2024, the sector has suffered negative growth for five consecutive years, and fell by 31.75% in 2023. In addition, although the dividend yield is nearly 3%, the overall P/E ratio of (P/E) is negative, and the net value ratio of the stock price is only 0.62 (P/B), reflecting the market's pessimistic outlook for housing companies.

The volatility of the real estate sector is extremely high, and the Sharpe Ratio ( is negative, indicating that its returns are insufficient to compensate for the risk, and it has lost its "investment" attribute based on quantitative data. This is not just short-term pressure but a sign of structural recession.

)BlackRock is out? Selling the last commercial office in Shanghai at a 30% discount, preparing for a complete withdrawal from the Chinese real estate market(

Current situation in Taiwan: low rent, high housing prices

If we shift our perspective back to Taiwan, we similarly face the problem of misallocation of funds in the housing market. According to statistics from the Ministry of the Interior, the average housing price-to-income ratio in Taiwan has reached 9.6 times, while in Taipei City it exceeds 15 times, far higher than the internationally reasonable level of 2 to 3 times, indicating that the threshold for young people to purchase a home is extremely high.

In addition, the rental yield is only about 1.5% to 2%. In other words, tenants only need to pay less than 2% of the property price to enjoy the same space and living conditions.

Furthermore, the government's housing control policies are increasingly unfavorable to buyers. As measures such as the integrated property tax, vacant property tax, and property hoarding tax gradually take effect, the drawbacks of high transaction costs and the almost non-existent cash flow returns for self-occupied housing will also become apparent:

For young people who are sensitive to capital efficiency, renting not only puts less economic pressure on them but also allows funds to be flexibly directed towards other higher-yielding markets such as the stock market or the crypto world.

In the current situation of high housing prices and low returns, buying a house is no longer a financial goal for many people, but rather a high-cost consumption behavior.

From the perspective of the crypto world, does buying a house equate to debt?

For investors in the crypto world, the liquidity, yield, and risk management of assets are far more important than "a sense of security" or traditional values. From this logic, real estate is indeed gradually losing its substantial property as an "investment," turning into a high-cost and low-return liability allocation.

The author believes that whether to buy a house should not only depend on the stage of life, but one must first ask oneself about the purpose, definition, and life pursuits related to buying a house.

This article looks at real estate investment in China and Taiwan from the perspective of the crypto world: Is it better to rent or buy a house? Originally appeared in Chain News ABMedia.