Philip Raices
Dear subscribers and readers of my column. I owe you an apology for not providing this information last week as promised, so please forgive me!
When examining global real estate markets, political systems play an outsized role in shaping property ownership, investment, and market behavior. In autocratic nations like China and Russia, real estate is not just an economic asset but also a tool for government control, political leverage, and wealth preservation. Both countries demonstrate how autocracy distorts market forces, limits private ownership rights, and ties property directly to state power.
China: Growth Engine Under State Control
1. No True Private Land Ownership
In China, land is ultimately owned by the state. Individuals and businesses only acquire long-term land-use rights — typically 70 years for residential properties. This arrangement leaves uncertainty about the renewal process and reinforces the government’s ultimate authority over real estate.
2. Real Estate as a Government Revenue Stream
Local governments rely heavily on land sales for funding, incentivizing aggressive development. This has produced large-scale urban expansion but also speculative excess, such as ghost cities and vast unused infrastructure.
3. State Intervention and Market Distortions
The Chinese state frequently intervenes in real estate, applying restrictions on purchases, mortgage lending, and pricing whenever the market overheats. Conversely, it pumps stimulus into the sector during downturns. The result is a market highly sensitive to policy shifts rather than consumer demand alone.
4. Current Conditions
In 2025, China faces a real estate slowdown, following crises involving major developers like Evergrande and Country Garden. Autocratic governance allows for massive state interventions, including forced mergers and credit injections. Yet, the lack of transparency, weak legal protections, and reliance on state management undermine investor confidence.
Russia: Real Estate and Political Power
1. Property Rights with Caveats
Unlike China, Russia technically permits private land ownership. However, property rights remain insecure under an autocratic system. Businesses or individuals can see assets seized or invalidated if they lose favor with political elites.
2. Oligarchic Concentration of Wealth
Much of Russia’s luxury and commercial real estate is concentrated in the hands of oligarchs closely tied to the Kremlin. Property often functions as a reward for loyalty, a safe haven for wealth, or a tool of political leverage.
3. Foreign Investment Barriers
Sanctions, corruption, and weak rule of law discourage foreign investors. Real estate deals with foreign entities are subject to government approval and often blocked if politically inconvenient. The result is an insular, politically charged market.
4. Current Conditions
The war in Ukraine and ongoing Western sanctions have further suppressed demand, especially from abroad. Domestic markets continue to function, supported by government spending, but affordability erodes under inflation and a weakened ruble. Unlike China’s growth-focused strategy, Russia’s market is shaped more by geopolitics and elite patronage.
Similarities Between China and Russia
•Weak Legal Protections: Investors cannot rely on independent courts to safeguard property rights.
•State Dominance: The government uses real estate as an economic lever or political tool.
•Distorted Market Forces: Prices, supply, and demand respond less to consumer behavior than to political agendas.
Key Differences
•China views real estate as a central economic growth engine, using policy levers to manage cycles of boom and slowdown.
•Russia treats real estate as a vehicle for elite wealth preservation and geopolitical maneuvering, rather than mass economic expansion.
Conclusion
Autocratic rule in both China and Russia ensures that real estate markets are less about free exchange and more about political and state control. For ordinary citizens, this means uncertainty over ownership rights, vulnerability to policy swings, and limited protection under the law. For investors, it means exposure to unpredictable risks dictated not by market logic, but by the will of the state.
In democracies, real estate tends to reflect consumer demand, supply constraints, and market fundamentals. In autocracies, however, property ownership and investment are inseparable from politics. China and Russia illustrate how autocratic governance transforms real estate from a traditional economic sector into an extension of state power.
Realizing the way China and Russia treat and control their real estate not through individual ownership but by government control; is this where we are heading in the U.S? If so this will only make the rich get richer, eliminate what we have left of the middle class and essentially create a larger segment of our population to become even poorer and be controlled by those who will have the power!
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 43+ years experience in the Real Estate industry and has earned 3 significant designations:
National Association of Realtors Graduate Realtors Institute (what I consider a Master’s degree in real estate).
Certified International Property Specialist – expert in consulting and completing international transactions.
National Association of Realtors Green designation: eco-friendly low carbon footprint construction with 3-D printed foundations, Solar panels, Geo-thermal HVAC/Heat Pumps).
He will also provide a copy of “Unlocking the Secrets of Real Estate’s New Market Reality, and his Seller’s and Buyer’s Guides for “Things to Consider when Selling, investing or Purchasing your Home.
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