Why so many Chinese millennials can afford their own homes (2024)

FAQs

Why so many Chinese millennials can afford their own homes? ›

The high rate of home ownership among younger Chinese could be due to the cultural value placed on owning property, relatively high incomes for young people, and the one-child policy allowing parents to devote resources to one offspring, analysts say.

Housing reform in China has been anchored on privatization of previously public rental housing through subsidized sales, commodification of the housing sector with massive provision of private housing, and promotion of homeownership, which have contributed to the rapid increase in homeownership in China (Huang & Li, ...

A 2017 HSBC report found that about 70% of Chinese millennials owned a home, compared with 40% of millennials worldwide. And for the Chinese millennials who didn't yet own a home, the report found nine in 10 planned to get one. Many of them get help from their parents.

China is a country of homeowners, where >80% of households own their homes and >20% of urban households own multiple homes. China achieved this unprecedented high rate home ownership in a short period of three decades.

Millennials, aged 27 to 42, make up the biggest group citing affordability as one of the key issues that's preventing them from buying a home. Older millennials, between 34 and 42, were the biggest group that cited the inability to afford the down payment or closing costs as a major reason why they don't own a home.

Down-payment requirements run as high as 80 per cent for big-city buyers, who save for years and tap parents for funds. That makes forced selling much rarer than in other countries, where downturns can push mortgages underwater, meaning the loan is worth more than the home.

Ownership rights

In general, rural collectives own agricultural land and the state owns urban land. However, Article 70 of The Property Law allows for ownership of exclusive parts within an apartment building, which endorses the individual ownership of apartments.

By 2025, millennials will make up about three-quarters of the working population in China. With an average annual income of US $52,000 (RMB ¥373,400), millennial respondents are not only better off financially, they are also more optimistic about their future ability to pay.

The average age of Chinese home buyers in 2018 was 29.5, a younger average compared with the rest of the world, suggested a recent report on a survey of Chinese home buyers in 2018, the Economic View app reported on Jan. 28.

WASHINGTON (March 28, 2023) – The share of baby boomers has surpassed millennials and now makes up the largest generation of home buyers, according to the latest study from the National Association of Realtors®.

What is the average rent in China? ›

How much is rent in China? Depends where you are but rent in a shared apartment can amount to 2,500 RMB to 3,500 RMB for a shared apartment in a Tier 1 city like Bejing or Shanghai. Additionally having your own studio can cost you around 4,000 RMB.

The median salary in China is 26,800 Yuan (USD 3,855) per month. That means half of the population draws an average income less than the median salary. In contrast, the other half earns more than the median salary.

In 2021, the average sales price for residential real estate in Shenzhen was over 61.6 thousand yuan per square meters. It was the highest price among all major cities in China. The average price across the country was 16,533 yuan per square meter.

Suzanne Rocha, a Bay Area real estate broker and owner of Cal Home Real Estate Services, said that based on her own experience and observation, almost half of millennials need some degree of help from family support, 401(k) withdrawals or down payment assistance programs to afford a home.

Key Takeaways. Millennials are not buying homes as readily as the previous generation. Delaying marriage and having children is keeping many Millennials at home with their parents. Tighter lending criteria can also make homeownership unaffordable or virtually impossible for those without much credit history.

Sky-high rent is why 39% of the millennials who moved back in with their parents last year did so, per a survey by PropertyManagement.com. More than half said they boomeranged back home to save more money. It's proof that living at home with parents can be financially beneficial.

The cost of living in China can vary by location and type of purchase. On average, China's cost of living is 45% lower than the U.S according to Numbeo. Rent in China is 60% lower than the U.S. on average.

If you look at land sales, Chinese real estate is in dire shape. As a result, there was a two trillion yuan ($290 billion) decline in income from land sales last year. And that drop continued into the first two months of 2023.

A healthy housing market is critical to China's economic growth and financial stability, but slowing home sales, driven by pandemic restrictions and demographic shifts, has unsettled both real estate developers and home buyers.

How have Chinese and Canadian investments developed over time? The share of Chinese investors in the U.S. real estate market remained somewhat constant until 2018 when it hovered at around 15 percent, before dropping to 11 percent in 2019 and then six percent in 2021.

Are Chinese buying American homes? ›

Chinese investors are among the top foreign purchasers of residential real estate, along with Canadians, according to the National Association of Realtors. Other states have had concerns over foreign ownership of land and have made efforts to regulate it.

The rent in China is usually paid a month in advance. The duration of your stay will also determine which type of accommodation is most suitable for you.

What is minimum wage in China? Minimum Wages in China remained unchanged at 2590 CNY/Month (363.882 USD/Month) in 2023. The maximum rate of minimum wage for employees was 2480 CNY/Month and minimum was 690 CNY/Month.

Credit Suisse found China's median wealth outpaced Europe's in its 2021 Global Wealth Report. The average Chinese citizen has a wealth of $26,752, around $60 more than the average European. Chinese wealth has surged in the past two decades, with median wealth per adult growing more than eight-fold.

Meanwhile, an annual income of $91,639 puts you in the top 1% in China, while you need to make more than $506,000 to be in the top 1% in the U.S. This shows that most of the Chinese wealth has come from increasing home values.

China has yet to formally announce a change to its retirement age, which is among the lowest in the world at 60 for men, 55 for white-collar women and 50 for women who work in factories.

China does not permit the private ownership of land. Instead, private parties may obtain the right to use property for up to seventy years. These parties own the structures on the land but not the underlying real estate.

The life expectancy at birth in mainland China was 77·7 years (95% CrI 77·5–77·7) in 2019 (81·0 years [80·8–81·0] for women and 74·8 years [74·7–74·8] for men).

Generation X and Millennial Households Are Expected to Inherit the Most Over the Next 25 Years.

Baby boomers have the highest net worth, averaging $1.6 million per household.

Why don t millennials have houses? ›

One reason millennials aren't buying houses is simply because the money just isn't there and the rates are just too high. According to Daniel Pitner, a real estate agent out of Glendale, Arizona, “The current interest rate environment has made homeownership extremely expensive on a monthly basis.

The cost of living in China can vary hugely depending on the cities, regions as well as the lifestyle you choose. If you plan to move to China, this might be something you are most curious about, so read on. You can live in most China's major cities for far less than $1,000 per month, and with a great lifestyle.

One example is the McDonald's Big Mac. It costs about 21.70 yuan in China and $5.71 in America, according to prices collected by The Economist.

Residents are generally subject to China individual income tax (IIT) on their worldwide income. Non-residents are generally taxed in China on their China-source income only (see the Residence section for more information). An individual is taxed in China on one's income by category.

Minimum wages in China continue to rise. As of April 12, 2023, Shanghai has the highest monthly minimum wage among 31 provinces (RMB 2,590/US$400 per month), and Beijing has the highest hourly minimum wage (RMB 25.3/US$3.9 per hour).

An average 80 square meter apartment within Shanghai's Inner Ring Road goes for upwards $886,000; while in the city's hinterlands it sells for around US$200,000. In Beijing, the average cost of a home of this size is roughly US$310,000.

Feng Shui

The Chinese believe a home should be a balanced environment where the position of doors, windows and furnishings help the good energy to flow through unencumbered. Light and airy homes with little clutter appeal to most people so Feng Shui practices are often just good common sense.

It has been reported that the average selling price has reached $39,370 per square meter ($3,658 per square foot), and total prices for units are between $6.3 million and $15.7 million.

What type of housing do millennials want? ›

Millennials — defined as those born from 1980 through 1999 — make up the largest share of homebuyers and mostly want single-family homes in the suburbs, according to the 2022 National Association of Realtors® Home Buyers and Sellers Generational Trends Report.

71% of millennials can afford less than half of the homes on the market⁵. Utah has the highest share of millennial homeowners at 59%, while California has the lowest share at 30%¹¹.

By the numbers: The number of millennial homeowners increased by 7.1 million between 2017 and 2022 to 18.2 million, a 64% increase. There are still 17.2 million millennial renters, which is still considered the dominant renter generation, RentCafe found.

Of Gen Zers currently saving money, 56.2% are saving for their first home. The majority of Gen Z (79.8%) believe they can only afford a home that costs less than $200,000. Only 6.9% of Gen Zers believe they can afford a home over $500,000 in their desired timeframe.

Gen Y: Gen Y, or Millennials, were born between 1981 and 1994/6. They are currently between 25 and 40 years old (72.1 million in the U.S.)

According to data from the 2021 National Association of Realtors (NAR) report, the typical age of all homebuyers has risen to 47 years old, up from 31 years old in 1981. On the other hand, the median age of Texas homebuyers is 47 and the median age of first-time buyers is 32. Do you want to buy your first house?

According to analysis from The Federal Reserve Bank of St. Louis, their entire generation may have missed out on economic opportunities their parents and grandparents all enjoyed. The Fed went so far as to call older millennials (those born in the 1980s) a “lost generation.”

Since the pandemic, more millennials are opting to live with their parents to save money and aren't in any rush to move out on their own.

The business cites that so many millennials want to leave their current employer due to a lack of engagement tactics and attraction and retention strategies. It's safe to say that based on these findings, millennials aren't interested in remaining with companies that don't tend to their need to feel engaged at work.

Chinese households have grown reluctant to purchase new homes in the past year, as the now-defunct Covid curbs, falling home prices and rising unemployment have discouraged would-be buyers.

Why is China's property crisis? ›

China's real estate market has slumped in the last two years after Beijing cracked down on developers' high reliance on debt for growth. BEIJING — China needs to do more in order to fix its real estate problems, the International Monetary Fund said Friday.

A healthy housing market is critical to China's economic growth and financial stability, but slowing home sales, driven by pandemic restrictions and demographic shifts, has unsettled both real estate developers and home buyers.

In play now in China, where around 70% of household wealth is in property, this phenomenon is weighing on the post-pandemic recovery of household consumption, which Chinese policymakers have vowed to make a more prominent driver of economic growth.

Interest Rate in China averaged 4.37 percent from 2013 until 2023, reaching an all time high of 5.77 percent in April of 2014 and a record low of 3.65 percent in August of 2022.

Whether housing investment will recover this year is one of the main uncertainties for China's economy. Real estate investment fell 5.7% in the first two months of the year compared with the same period in 2022, according to official data.

As property developers run out of funding to finish properties, a growing number of buyers in China have stopped making mortgage payments on incomplete homes. The boycotts are a sign of the distress in China's property market as the government seeks to rebalance the sector.

To help solve the debt crisis among property developers, Beijing will set up a rescue fund of up to 300 billion yuan (US$44.3 billion), starting with 80 billion yuan. The money may be used to help developers complete unfinished projects, and purchase units which can be let out as rental housing.

Because China is a socialist country, all land is either subject to government ownership or collective ownership. In principle, municipal land is subject to government ownership and land outside cities is subject to collective ownership. However, one can obtain the right to use the land.

Chinese buyers bought $6.1 billion in existing homes in 2022, up 30% from the prior period even as the number of homes purchased by Chinese buyers dropped. That's because the average Chinese purchase price jumped from $710,000 to just over $1 million in the same period, by far the biggest average budget of any country.

China Property Crisis Puts $1.6 Trillion of LGFV Debt at Risk - Bloomberg.

Is there an oversupply of housing in China? ›

China's property market has an oversupply of unsold apartments. In February, China had 3.5 billion square feet of completed but unsold apartments, equivalent to around four million homes, the worst oversupply since 2017.

The United States is the richest country in the world with the highest GDP, as of 2021. China is the second richest country in the world with a $17.734 trillion GDP.

The U.S. currently has the largest economy in the world by far with $23 trillion in 2021 GDP, according to the World Bank's data, while China has the second-largest GDP at $18 trillion and India the sixth-largest at $3 trillion.

How much is rich in China? Millionaires are defined as individuals with personal wealth of over 10 million yuan, and super-rich are defined as individuals with personal wealth of 100 million yuan or above. One yuan equals approximately 0.16 U.S. dollars and 0.14 euros (as of April 2022).