Highlights

Young couple bumps into housing dilemma

(Xinhua)
Updated: 2009-11-26 18:46

Chinese home prices and trading volume began to rebound after the Spring Festival, as many first-time buyers thought home prices had hit the bottom, says Chen Sheng, vice president of the China Index Academy, a private-sector research institute specializing in real estate.

"As the market saw a buying spree boosted by first-time home buyers, investors and those who traded up for better flats came in and have pushed prices nationwide even higher since May," Chen says.

The surge on the back of the credit-driven stimulus package and lower loan rates took many developers by surprise, he says. The backlog of commercial homes in Shanghai was enough for eight months sales at the start of the year, but had since fallen below 10 weeks.

Experts assert a market rebound and reduced backlog prompted state-owned and private developers to buy more land. Massive lending this year also helped developers to buy them at sky rocketing prices.

This practice further shored up prices of existing and second-hand homes in nearby areas, and increased potential buyers' concerns, Qin says.

After Guangzhou-based private-sector R&F Properties bought a site within the eastern third ring road of Beijing in May for 1.022 billion yuan, 242 percent above the opening bid, second-hand home prices rose 6.5 percent to 16,500 yuan per sq m in less than 10 days at nearby communities, 5i5j figures show.

Second-hand home prices in the area had surged to around 30,000 yuan per sq m as of Thursday, Qin says.

Residents or travellers passing high-end residential buildings in Beijing at night often remark on the number of apartments with no lights on.

There are no occupancy figures at city or national levels, but some Chinese believe buying property is a better and more stable investment than buying shares. Some buy several apartments and wait for their properties to appreciate in value without renting them out, Qin says.

Affordable Homes

Young couples like Shou and Sun have few options. They are not eligible for applying for affordable housing and the affordable homes are often far from the downtown areas.

In Beijing, only families with a total annual household income below 88,000 yuan are eligible to apply for affordable housing.

"We don't qualify to buy an affordable home, and life is not easy after buying another home on installment. We have shortened our daily shopping lists and cut our budget for the wedding and honeymoon," Shou says.