A valuation multiple perspective:
the rent/price ratio (annual rent / home price) in Shenzhen is about 1%, much lower than major American cities that enjoy such ratios of 6%+.
It seems that the valuation of real estate in China (major metro) is much higher. however it may be explainable: the expense ratio in China is much lower than in the USA.
- property tax: China doesn't have a property tax yet as of 2026 (0% property tax rate per year)
- insurance: the insurance policy for homes are under-developed and are not hugely required.
- maintenance: the labor cost and manufactured equipments cost much less.
- property management / HOA fees: these may be the largest holding expense. In a 10M house (assuming 200 sq meters), annual expense is 400/sq meters = 80K = ~1%. This is on par with a lot of homes across both countries.
Thus - the high cash expenses hurt the valuation of the US property - leading to a lower price/rent ratio, or equivalently, higher rent/price ratio.
A cash flow perspective:
For primary residence: you need to consider the potential of asset appreciation and expense ratio - because that's what matters to the cash flows. For this perspective - China house is slightly more attractive, mainly due to its reduced expense ratio.
- Look for minimized expense ratio, but high upside for asset appreciation for primary residence.
For rentals, you need to consider rent ratio and expense ratio. The cash flows are more important here.
- The greater the rent exceeds the expense, the better.
- High expense ratio in the US can be compensated by high rent ratio. Low rent ratio in China is matched by the low expense ratio - from the operating cash flow perspective, they are equivalent.
- Avoid high expense, low rental property as investments.