More efforts needed to solve housing problem in metropolises

A real estate agent （left） fields queries from prospective homebuyers at a shopping mall in Shanghai on Aug 1. [Photo by Lyu Liang/For China Daily]

Since the launch of the housing reform in the mid-1990s, the ratio of house ownership in China has increased drastically; in fact, it is higher than in many developed countries. But it will take  more efforts to solve urban housing problem.

People's yearning to have a house of their own has contributed to the boom in China's real estate market. A survey conducted in 2020 showed that on average an urban family owned 1.09 houses. This is in stark contrast to the situation a few decades ago when, in many cases, two or three families had to share one apartment. However, statistics often don't reveal the whole truth. For example, some survey results show that one urban family owns 1.1 houses. While, according to other sets of data, over 40 percent urban households own more than two houses. This implies that millions of urban families still don't own a house. Relevant surveys among graduates from top Chinese universities or overseas colleges show that owning a house in big cities like Beijing is a dream for almost all of them.

The urbanization drive in recent years has prompted millions of university graduates and migrant workers to settle down in big cities. While the rising housing demand and speculation in the real estate sector have raised housing prices in metropolises such as Beijing, Shanghai and Shenzhen, with the average housing price being about $10,000 per square meter. Many young people cannot afford to pay that sort of money, for a typical young couple working in government agencies or companies earn about $3,000 per month. Some may manage to fork out the down payment with the help of their parents and become the so-called "housing slaves" who have to end up paying monthly or quarterly installments for housing loans for years. As a result, many young professionals quit their jobs in big cities to return to their hometowns or move to smaller cities in spite that they would have better career prospects in big cities. So high is the concern about housing that many young people looking for a life partner take "owning a house" as the main condition for marriage, according to some match-making agencies in big cities.

Over the past few years, the central government of China has taken strict measures to curb the rise of housing prices by, for instance, making it more difficult for a family to buy a second house. Local governments, meanwhile, are building affordable housing to be let out to talented professionals and low-income people－for about $500 a month, while the market price is usually at least 30 percent higher.

However, will such measures work in the long term? Housing prices in big cities have been stable for a few years, yet the supply of affordable housing has failed to keep pace with the fast-increasing demand. And since young talents cannot afford to wait till the situation turns in their favor, many of them are voting with their feet by moving to smaller cities where they can buy a house thanks to lower prices. Some observers say that it is unrealistic to expect housing prices in big cities to drop drastically in the short term, mainly because of the rigid and rising demand and it will take local governments a long time and a lot of money to provide affordable housing for all those in need. Hence, the observers suggest, it would be more realistic to persuade young couples to forget about owning a house and  enjoy a better life by living in a rented apartment. The rent for a two-room apartment in big cities on average is about $1,000 a month－$500-600 for affordable housing. Although this seems pretty high, it is a good bargain considering it would cost about $1 million to buy a house.

China already has a higher ratio in terms of house ownership than many developed countries. In Germany, for instance, the majority of families live in rented houses while in Berlin, the ratio is over 80 percent. It may take a long time and a lot of work to change Chinese people's mindset of owning a house. But efforts to save young couples from "housing slavery" would be worthwhile.

Edited by Wang Miao with reference to http://global.chinadaily.com.cn/a/202112/07/WS61ae9c26a310cdd39bc79b4d.html