Chinese homeowners buy their first homes too early and the homes are too large, the Academy of Social Sciences has warned in a report.
Concerns over future increases in house prices were driving young urban Chinese to buy their first homes “too soon”, thus worsening housing shortages in China’s hubs, the Academy wrote in its annual report on the state of the nation’s real estate market.
The average Chinese city dweller takes on their first mortgage at the age of 27, far earlier than their counterparts overseas, according to a 2010 study by Everbright Bank.
The average first-time home buyer in Canada is 29 years old, according to a study by the Bank of Montreal published in April, while in Britain, the average age is 35, according to a survey by Post Office Mortgages published in September last year.
Another factor influencing first-time buyers was traditional pressure on couples to own their own homes before they got married, the report argued. Despite a rise in “naked marriages” between those who don’t own houses and cars, the longing for “a sense of security” pushed people to buy homes early.
The growing trend of home ownership at a young age was one of several problems identified in the annual survey, which could force some cities to “confront the risk of real estate bubbles”, the think tank said.
“Accumulated contradictions between supply and demand” could lead to unaffordable ghost towns, the study warned.
Residential property prices have risen eight per cent on average in the 35 cities surveyed in the report over the past year. Shenzhen led the national ranking, with one square metre of residential housing costing 18,996 yuan (HK$24,014) on average. Beijing, Shanghai, Hangzhou and Guangzhou followed.
The think tank urged the government to increase transparency in public tenders to help guarantee a fairer allocation of land in China’s cities, persecute and punish corruption and implement a law guaranteeing affordable housing, especially for rural migrants.
Property prices in remote provincial capitals saw the greatest increases over the past year with prices in Gansu’s capital Lanzhou up 28.2 per cent followed by Xining, the capital of Qinghai province, and Guiyang, the capital of Guizhou.
In the Western regions investment in residential real estate in Guiyang increased by 87.8 per cent last year, followed by Xining and Lanzhou.
Nationally, investment in real estate shows no sign of slowing, according to figures released by the National Bureau of Statistics on Tuesday. In the first six months of this year, total investment reached 3.7 trillion yuan, up 20.3 per cent from the same period last year.
Investment in residential buildings in the first six months grew by 18.8 per cent in China’s developing eastern region while growth in the central regions stood at 22 per cent and in the western regions at 25.5 per cent.