Young Chinese say real estate isn’t the nest egg it was once all cracked up to be

Name: China reports first population decline in 6 decades, with birth rate at record low in 2022
Uploaded: 2023-01-27T04:00:14.000Z
Duration: 3 min 18 s
Description: China reports first population decline in 6 decades, with birth rate at record low in 2022

China’s older generation invested considerable savings in property, buying up homes and flats that would hopefully appreciate over the years, but times are changing

While Chinese leaders still consider real estate to be a pillar of the nation’s economy, investor confidence appears to be waning among members of Generation Z

4-MIN READ4-MIN

Demographic changes in China are expected to have “increasingly significant repercussions” on the country’s property market. Photo: Bloomberg

He Huifengin GuangdongandJane Caiin Beijing

Published: 12:00pm, 27 Jan 2023

Once a primary means of wealth accumulation for China’s middle class, real estate is rapidly losing its appeal among the younger generation, and experts say the change highlights how the nation’s rapid demographic shift has far-reaching implications.

Patrick Lu, 32, a lawyer in the southern metropolis of Guangzhou, is disinterested in investing in housing, unlike his parents who own a couple of two-bedroom apartments in the city.

“In the past, a majority of Chinese people – those born between the 1960s and 1980s – invested most of their income in the real estate market. The stock of houses is huge,” said Lu, who is single and rents a flat with colleagues, close to their law firm. “But we no longer think like the older generation.

“We don’t think the properties our parents leave us will be worth as much as they used to be, especially in lower-tier cities. That’s the reality, whether you accept it or not. There will be fewer young buyers.”

03:18

China reports first population decline in 6 decades, with birth rate at record low in 2022

The demographic changes in China will have “increasingly significant repercussions” on the country’s property market, as well as on the various social, economic and political sectors, and those repercussions will extend well beyond its shores, according to Joseph Chamie, a demographer and former director of the United Nations’ Population Division.

“As has been the case in many other countries worldwide, the combination of demographic ageing and population decline typically translate into serious negative consequences for the property market,” Chamie explained.

China’s population growth started to slow in 2016, and the total population fell by 850,000 last year, to 1.4118 billion, marking the first drop in six decades. Many demographers warn that the trend is irreversible, and they say that effective fertility support measures are critically important to stem the tide.