Houses in Beijing’s top school district lose allure with young parents as authorities change admissions policy
- A mother of a four-year-old girl has found that a US$1.14 million Xue Qu Fang – a house in a good school district – does not guarantee her child a spot in an elite school
- Following a meeting chaired by President Xi Jinping in April 13 top cities plan to roll out measures to curb speculation of homes in school districts
Chinese policymakers’ crackdown on Xue Qu Fang – homes in good school districts – is worrying buyers. Young parents fear they could lose out on an assured place for their children in elite schools and an assured appreciation in home prices. Authorities, however, seem to have found a way to cool down runaway property prices.
Fang Liang, mother of a 4-year-old girl, has had recurring nightmares in the past few days. They were all about a 7.4 million yuan (US$1.14 million) Xue Qu Fang she bought earlier this year, despite which she failed to secure a seat for her daughter in an elite school nearby.
“Sometimes, my phone would suddenly ring and when I would answer it, the voice on the other end would say in an indifferent voice that my daughter had to go to a low-ranked school,” Fang said, recounting her nightmares.
She fears the millions of yuan she has spent on buying the home have gone down the drain.
Fang bought the 35 square metre (377 sq ft) flat in January in Xicheng district, paying more than four times the average price of a lived-in home in Beijing and nearly double the asking price of a similar size home a few blocks away.
The 30-year-old flat, about 10 minutes’ drive from Tiananmen Square and the Forbidden City, sits in the Yuetan neighbourhood that boasts five of the top 10 schools in the capital. This includes Beijing No. 8 High School, the alma mater of Zhou Xiaochuan, the former head of People’s Bank of China and Deng Jiaxian, the father of China’s nuclear programme.
Fang started fearing the worst when posts on Xue Qu Fang went viral on social media. Parents who bought homes in Yuetan were informed in early July by local education officials that their children would be admitted to schools in other Xicheng neighbourhoods.
The move signalled that a hukou of a subdistrict in Beijing might no longer be enough to secure a spot in a primary school in that subdistrict. The policy has been discussed for years across China, but it has not been actually adopted in most places.
Forget Hong Kong’s micro flats, itsy-bitsy 72 sq ft Beijing space sells for a whopping US$384,500
Following that meeting, 13 major cities including Beijing, Shanghai, Guangzhou and Shenzhen said that they would roll out measures to curb price speculation of school-district homes.
Analysts said that such changes to school-admission policies could cause house prices to cool quite drastically.
“People used to believe that no matter what, the price of a school-district home in Beijing would not drop,” said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute.
But now they are finding that it is not a one-way street; their blind expectation of increasing home prices will disappear gradually, he added.
08:07
Cheap housing but few economic opportunities for young Chinese in city along Russian border
“I started to save money for this [Xue Qu Fang] since my daughter was little. I was so sure that this was the best way for her to get a good education and I could sell it after she graduated without having to worry about prices dropping,” said Fang. “If this home cannot guarantee a spot in a good primary school, what is the point of paying such an eye-watering price?”
While this may have turned out to be a bad dream for parents like Fang, it is good news for China’s policymakers who are keen to crack down on runaway home prices and also anxious to avoid any possibility of a housing market collapse, such as the one that took place in Japan in the late 1980s.
“Cracking down on prices of school-district homes would be the most powerful weapon we’ve seen used by the government to rein in China’s overheated housing market,” said Yan.
