China Tenants Snap Up Sub-3 Million Yuan Flats as Mortgage Payments Undercut Rent
Updated
Updated · South China Morning Post · Jun 1
China Tenants Snap Up Sub-3 Million Yuan Flats as Mortgage Payments Undercut Rent
1 articles · Updated · South China Morning Post · Jun 1
Homes priced below 3 million yuan accounted for 70% of Centaline Property transactions in April, up from about 64% a year earlier, as tenants in major Chinese cities increasingly bought small pre-owned flats.
Monthly mortgage payments are now about 700 yuan lower than rent for some buyers, prompting first-time homeowners to use years of savings to purchase units typically smaller than 50 square metres.
Banks have yet to see a meaningful mortgage-business recovery because many buyers are making larger down payments to reduce interest costs, limiting new loan growth despite the pickup in transactions.
The shift follows a five-year property slump that has pushed down home prices, encouraging buyers to bet on a housing-market turnaround that has still not broadly arrived.