Buying a bigger home to raise more children is so expensive that parents in China are deciding against having a second baby, undermining government efforts to boost the population, according to a new survey.
More than a third of respondents in the survey by Ke.com Research said they are against having a second child, with nearly half of those citing the heavy economic burden as their major concern.
“Buying a home is just too expensive and we cannot afford a bigger one for having a second child,” was the reasoning offered by some 20 per cent of those who said they have no intention of having another child.
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The problem is so serious, the government will have no choice but to introduce more stringent measures to rein in property prices, said one analyst.
The research unit of Beijing-based online property portal Ke Holdings quizzed 1,500 families across 179 Chinese cities for the survey.
In 2015, China scrapped the one-child policy that had been strictly enforced for more than 35 years, allowing every family to have two children amid a historically low birth rate. However, the country’s runaway home prices may be seriously hampering Beijing’s efforts to boost fertility and reverse the ageing population.
Apart from an initial spike in 2016, China’s birth rate has continued to fall. Last year, the country recorded 14.65 million births, as the birth rate dropped below 10.5 per 1,000, the lowest level in 50 years.
Home prices have surge more than 60 per cent since 2016, according to the E-house China Research and Development Institute.
“They just cannot afford to buy a larger home, especially in cities like Beijing, Shanghai and Shenzhen. Even if young couples do believe that another child would be company to the firstborn and make a happier family, the reality curbs their willingness,” said Yan Jinqiang, senior analyst with Ke.com Research.
An index in the report showing the popularity of having a second child among people in different locations showed that Beijing and Shanghai ranked bottom of all 31 provincial-level cities in China, except for three in northeast China where severe population outflow distorts the figures.
More than half of the survey respondents believed a three-bedroom home would be appropriate for raising two children. That would cost about 6.7 million yuan (US$1.02 million) in Beijing, and almost 6 million yuan in Shanghai and Shenzhen.
“We will see more cooling measures to curb home prices by local and central governments in the future as we have seen the negative impact of expensive homes on young couple’s family planning and their intention of giving birth to more children,” said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute.
The Chinese authorities have started reapplying curbs they had lifted earlier this year when buying sentiment was hit hard by coronavirus. Shenzhen, for example, has brought in stringent new measures to crack down on the purchases of second homes in “China’s Silicon Valley”.
Hangzhou, home to famous companies like Alibaba, NetEase and the water-bottling firm Nongfu Spring, in September said parents moving to the city to be near their children who work there must complete three years of local residency before they are allowed to buy a home.
Government measures to cool China’s residential market should result in a 5 per cent drop in home prices in 2021, according to international credit rating agency S&P.
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