Potential homebuyers get information on the property market in Beijing on Dec 23, 2018. (PHOTO / IC VIA CHINADAILY.COM.CN)
For young Chinese professionals from all parts of China working and living in Beijing, high home prices create twin anxieties: big loans that may take a lifetime to pay off; and the fear of property price falls.
I was born in Beijing and live with my family, which means I don't feel the "stressful" housing problem that some of friends who have come from other places constantly discuss.
"It's fairly stressful to live in Beijing. The major reason is that every month more than 17,000 yuan (US$2,473) goes toward mortgage repayment, straining my family's finances," said Gloria Yang, 29, a friend who hails from Central China's Hubei province.
It's fairly stressful to live in Beijing. The major reason is that every month more than 17,000 yuan goes toward mortgage repayment, straining my family's finances
"Straining" here should mean just that. Both her salary and her husband's stipend as a reading doctor can't cover mortgage repayments and living costs. The couple depend on their parents' financial support. "I hope the situation will get better after my husband graduates and starts to work," Yang said.
"Last year, a pre-owned apartment similar to mine, one floor below in the same building, sold for about 150,000 yuan less than what we paid for our home. I wouldn't be happy if (pre-owned) home prices continue to fall, as that would mean I'd end up paying off debts for something that's not really worth that much."
Yang's sentiments may find an echo among many young people in Beijing, Shanghai, Guangzhou and Shenzhen－China's first-tier cities. Over the past decade, pre-owned home prices rose 12 percent year-on-year there, said a report from Haitong Securities. Forget buying brand new properties, even old homes, it seems, are beyond reach.
But the situation may change for the better. This year, city-and county-level administrations have continued to tweak housing regulations to prevent property markets from overheating or contracting. First-tier cities are trying to rein in the runaway rise of new home prices.
Such measures are helping shape stable expectations of home prices, which will in turn ease concerns that falling pre-owned home prices will drag a family such as Yang's into having more debts than assets.
To be sure, there's no magic wand that can simply shrink young people's mortgage amounts. But there's no cause for despair either.
A more efficient capital market, in tandem with the flourishing asset management industry, is expected to help them maximize returns on their investments made from their savings, and thus reduce debt burdens. As a financial journalist, I'm aware that over the past few months, top regulators have attached unprecedented importance to facilitating the development of China's capital market. The launch of Nasdaq-styled STAR Market in June is a case in point. For individuals, this could mean more personalized financial products with higher investment efficiency in the future.
READ MORE: China's home prices remain stable in June
More measures are underway to help young people who haven't been able to purchase homes due to high prices, to become homeowners, as well as others who wish to rent homes in convenient or coveted housing estates that are currently beyond their budgets. New rental markets are being developed quickly. Housing supply is being increased in cities that have net inflows of people from other places.
I think China's current thrust on high-quality development will help tackle the problem of high costs of housing, as ensuring people's happiness continues to be a top priority for the nation.
HONG KONG NEWS