A man locked up in bonds goes on parade at the 9th China International Real Estate & Archi-Tech Fair (CIHAF) in Beijing on December 11, 2007. [Photo: cnsphoto] Xiao Zhang is the same age as Wang. He also graduated in 2005 and decided to settle down in Beijing. Zhang wants to buy an apartment so that he can get married with his girlfriend. Zhang visited nearly all of the under-construction developments in eastern Beijing in the first half of 2006. As time went by, he found that he could only afford an apartment outside of the Fourth Ring Road.
Just like most young home buyers of his age, Zhang has to rely on his parents to pay for the initial down payment on the mortgage. It was also a huge burden for them, taking them over a month to borrow the 300,000 yuan necessary. But soaring housing price gave Zhang a big shock¡ªit went beyond his budget! As a result, the young man had to turn his eyes to eastern Beijing's Tongzhou district, which is outside of the Fifth Ring Road. And at the beginning of 2007, Zhang finally bought an apartment of his own in the suburb. The price of Zhang's house was 5100 yuan/sq at that time, and it has been doubled now according to the young man.
Post '80s home owners are described as panic-buyers by some analysts. If you think Wang and Zhang are not typical, let's get to know a real panic home buyer¡ªXiao Chen.
Chen is the brother of Zhang's girlfriend. He is still a graduate student who is studying economics. Since Zhang's sister began her home hunting, Chen has been intrigued by the idea of buying a home of his own.
As an economics major, Chen reckons that it's almost impossible that housing prices in Beijing will decrease in the future. Despite the possibility that Chen will leave Beijing after graduation, he decided to buy a house, which he describes as pinning the cost before it rises.
"Since we all think that house prices will not decrease in the future, we'll not suffer any lose if we buy a house now, even if I might leave Beijing and sell the house after graduation."
Recently, Chen successfully joined the city's mass group of young "house slaves" and bought a house in a development are near the Batong railway line. However, as a student, Chen's parents also had to help him pay for the mortgage.
According to a yearly report by Golden Keys, in which they divide home buyers into four age groups, young people, in the group "under 35 years old", accounted for 42.5 percent of buyers in 2007, 15 percent of which were college students. And 57 percent of commodity houses in Beijing were purchased by non-Beijingers.
Psychological panic leads to the mass purchasing behaviour of some consumers. "In this case, 'panic buying' means those who buy a house ahead of their original plan, in the fear of rising prices, will pay more in the future," Zhang Lei, chief of the market research centre of Golden Keys, explains the "panic buying" phenomenon.
In the meanwhile, the buying behaviour of young people had also helped push forward the rising price of housing. Zhang Lei advises that the biggest risk these young home owners face is the loan risk. Rising bank interest rates may give them more pressure in the future.
Translated from "Youth Weekly"
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