Chinese families search for bigger homes as two-child policy means 17million babies could be born by 2021
Beijing estimates the recent change will result in an extra 17 million babies being born within the next five years
China’s switch to a two-child policy has sparked a rise in sales of large three or four-bedroom homes in major mainland cities.
Many couples in cities like Beijing and Shanghai are making early preparations for bigger families by hunting for larger homes with a better environment.
Real estate agents say interest in larger flats bloomed upon Beijing’s October announcement that it would be relaxing the one-child policy. The government estimates the change, which came into force on January 1, will result in an extra 17 million babies being born within the next five years.
“The impact of this policy is huge on residential markets,” said Cai Shiyang, a veteran agent at Maitian Real Estate in Beijing.
“During the past few months, people have been snapping up three and four-bedroom flats. In the area we cover, all the available three-bedroom flats at reasonable prices have sold. Many of our customers have to wait for new flats to come out.”
Cai’s team covers the Asian Games Village area in the north of Beijing. In the past, larger units accounted for less than 30 per cent of all deals, with buyers put off by high prices and the higher tax rate for flats larger than 970 sq ft. Most turned to one and two-bedroom units. “But now, half of our deals are for these large units,” he said.
Stella Nie, a Beijing office worker, learned from a real estate agent in November of interest in her four-bedroom flat in the western Fourth Ring Road area.
She had planned to sell the flat to buy a home closer to her daughter’s school in the downtown area, but had struggled to find a buyer.
“I put my flat on sale nearly a year ago. But nobody ever showed an interest,” said Nie, who had priced her flat at 15.6 million yuan (HK$18.5 million), higher than the market average. “So I was a little surprised when they told me they had found a buyer.”
The impact of this policy is huge on residential markets
Nie offered a slight discount and the flat was sold. But buying a new place wasn’t as easy. She and her husband were hunting for a three-bedroom flat in the southern Second Ring Road area.
“There were a few times when we had our eyes on a certain flat and wanted to seal the deal with the homeowner but found out at the last minute that someone else had beaten us to it,” she said. They settled on a four-bedroom flat, paying 17.2 million yuan.
Rising demand has driven up prices. Cai said the average price for a three-bedroom flat had risen from 200,000 yuan to 1 million yuan in the Asian Games Village during the past six months.
These families say they need at least three bedrooms. One for the parents and the younger kid, one for the elder kid and the other for grandparents or domestic helper
Li Yong, an agent with Beijing’s largest real estate service provider Lianjia, said 20 to 30 per cent of his clients were buying homes in preparation for having two children. Li said: “These families say they need at least three bedrooms. One for the parents and the younger child, one for the older child and the other for grandparents or a domestic helper.”
Cai Guanyu, an analyst with Century 21 Real Estate, noticed a similar trend in Shanghai.
The share of customers seeking units larger than 1,300 sq ft and priced within 5 million yuan had risen from 30 per cent to 60 per cent during the past year, Cai said.
She added: “The impact of the two-child policy is just being seen. We are expecting an even stronger demand for large flats, as well as those close to good schools, in the next two years.”
