Rising Urbanization Keeps Housing Prices in China Elevated
There is no unified housing price in China. The higher housing prices in the first-tier metropolises, some provincial capitals and coastal cities are prominent. But in most small cities, the property prices are going down. From a long-term perspective, this trend will continue, as the big cities continue to attract more people to settle in. Secondly, most families across the country have already owned their own homes. Those without a house or having difficulties buying a house are young migrant workers. In megacities like Beijing, Shanghai, Guangzhou and Shenzhen, for young people who seek a better future, no matter what jobs they hold and how much salary they earn, they will find it difficult to buy a house instantly, and will need assistance from their parents and relatives. It is especially tough for those whose parents cannot help. For young migrant Chinese who struggle for a living in places like Beijing and Shanghai, they must rent a house first and then buy one with bank mortgages. They will be into their 40s when they can pay all the loans back. To ease the pressure on young people buying houses, Beijing has carried out various measures such as offering government subsidized homes. The best case scenario for housing prices is stability. Skyrocketing housing prices only bring abnormal economic cycles and deal a blow to young people who want to buy a home in the cities. If the housing prices fall sharply, the assets of most families would shrink which may result in a financial crisis.