Amid a glut of millions of unsold homes in smaller cities, China wants migrant workers to buy some of them and ease the burden on the property sector, which accounts for about 15 percent of the country’s economic growth.
The effort underscores Beijing’s concerns over a stock of roughly 1 billion square meters of vacant housing — about 13 million homes or enough to house the population of Australia — and the broader knock-on effect of any defaults by struggling property developers as the world’s second-largest economy grows at its slowest pace in a quarter of a century, Reuters reported Monday.
While encouraging migrants to buy homes in lower-tier cities seems like a remedy to boost demand, making money available to them will prove tougher.
Many of China’s more than 270 million migrants earn less than 3,000 yuan (US$462) a month, less than half the cost per square meter needed for a home in a lower-tier city such as Changzhou, Jiangsu province.
The authorities will need to find property developers willing to sell homes at a discount and local governments ready to subsidize purchases.
“Conditions are not mature for migrant workers to buy unsold homes. You can’t count on a certificate for housing ownership to resolve everything,” Jason Hu, head of research at Chinese property consultant Holdways in Beijing, was quoted as saying.
“Everyone wants to settle in the city, but where’s the money?”
Hu said other issues need to be resolved, such as giving migrant workers equal access to social security and public services.
Senior leaders have said China will step up efforts to tackle property inventories this year, including helping migrant workers buy or rent homes in cities, and encouraging developers to cut prices.
The authorities aim to get 100 million migrants to settle in cities by 2020, and officials in small and medium-sized cities have pledged to give permanent resident status, or hukou, to more rural people, although access to welfare remains a concern.
Another potential obstacle is that more than 70 percent of migrant workers already living in cities prefer to rent, National Health and Family Planning Commission figures show.
“If I can earn enough, I’d go back to the city near my hometown and buy a home there,” said a 26-year-old restaurant worker in Beijing surnamed Long, who left his village in Hunan province five years ago.
“Prices here are too high, it’s impossible for me to settle here.”
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