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Paying killer prices for flats left empty
By Jiang Xufeng |
December 7, 2009, Monday
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Print Edition
Print Edition
SHOU Zhenwei, a 28-year-old state-owned company employee in Beijing, paid 1.4 million yuan (US$205,000) for a two-bedroom apartment this month.
The price was 400,000 yuan higher than Shou's budget at the beginning of the year, but he and his fiancee, Sun Hua, felt they should buy quickly before prices went up further.
Shou's home outside Beijing's northern second ring road is less than 70 square meters, which equates to more than 20,000 yuan per square meter for the pre-owned apartment built two decades ago. That works out at two months of Shou and Sun's total monthly gross income for each square meter.
"We have only worked for two years, so we don't have much saved. We want to get married next year, so we had to borrow 600,000 yuan from parents and relatives for the down payment," Shou says.
Sun works in an export-oriented firm and sagging export demand resulted in smaller paychecks this year. "I feel uncomfortable borrowing so much hard-earned money from parents and relatives, but we have no other alternative in the face of increasingly rising home prices," she says.
The 4,700-yuan monthly installment going to the bank for the next 20 years is almost half of their combined income.
The couple's story is common as home prices have gone through the roof since February. Average prices of pre-owned homes in Beijing have soared 49 percent since the beginning of the year to around 16,100 yuan per sqm at the start of this month, says Qin Rui, a senior analyst with Beijing-based 5i5j Real Estate Service.
"There are bubbles in the home prices, as many home buyers find the prices in big cities too high," Qin says.
Figures from the National Bureau of Statistics show home prices in 70 metropolitan areas, including Beijing and Shanghai, rose 3.9 percent in October from a year earlier, the fifth consecutive monthly spike.
Residents or travelers 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.
Young couples like Shou and Sun have few options. They are not eligible to apply for affordable housing and the affordable homes are often far from the downtown areas.
"We don't qualify to buy an affordable home, and life is not easy after buying a home on installments. We have shortened our daily shopping lists and cut our budget for the wedding and honeymoon," Shou says.
Next year Valentine's Day is also the first day of the Chinese Lunar year. Shou and Sun will buy each other a modest gift, and carry bigger gifts back to parents and relatives who lent them money for their home dream.
(The author is a Xinhua writer.)
The price was 400,000 yuan higher than Shou's budget at the beginning of the year, but he and his fiancee, Sun Hua, felt they should buy quickly before prices went up further.
Shou's home outside Beijing's northern second ring road is less than 70 square meters, which equates to more than 20,000 yuan per square meter for the pre-owned apartment built two decades ago. That works out at two months of Shou and Sun's total monthly gross income for each square meter.
"We have only worked for two years, so we don't have much saved. We want to get married next year, so we had to borrow 600,000 yuan from parents and relatives for the down payment," Shou says.
Sun works in an export-oriented firm and sagging export demand resulted in smaller paychecks this year. "I feel uncomfortable borrowing so much hard-earned money from parents and relatives, but we have no other alternative in the face of increasingly rising home prices," she says.
The 4,700-yuan monthly installment going to the bank for the next 20 years is almost half of their combined income.
The couple's story is common as home prices have gone through the roof since February. Average prices of pre-owned homes in Beijing have soared 49 percent since the beginning of the year to around 16,100 yuan per sqm at the start of this month, says Qin Rui, a senior analyst with Beijing-based 5i5j Real Estate Service.
"There are bubbles in the home prices, as many home buyers find the prices in big cities too high," Qin says.
Figures from the National Bureau of Statistics show home prices in 70 metropolitan areas, including Beijing and Shanghai, rose 3.9 percent in October from a year earlier, the fifth consecutive monthly spike.
Residents or travelers 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.
Young couples like Shou and Sun have few options. They are not eligible to apply for affordable housing and the affordable homes are often far from the downtown areas.
"We don't qualify to buy an affordable home, and life is not easy after buying a home on installments. We have shortened our daily shopping lists and cut our budget for the wedding and honeymoon," Shou says.
Next year Valentine's Day is also the first day of the Chinese Lunar year. Shou and Sun will buy each other a modest gift, and carry bigger gifts back to parents and relatives who lent them money for their home dream.
(The author is a Xinhua writer.)
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