Beijing slaps real estate ownership restrictions on residents

Beijing: Young Australians aren’t the only ones feeling locked out of a red-hot housing market that seems unfairly skewed towards their parents’ generation.

Beijing median housing prices, which outstrip those in Sydney and Melbourne, have prompted not only a government crackdown on new home buyers, but a viral song lamenting the lost housing dream of the young.

Called My Mother-in-law Keeps Shouting at Me to Go and Buy a House, the video has been rapidly shared on social media in China.

The song laments that old “hutong” neighbourhoods are just wishful thinking for young families, because a second-hand home in Beijing costs 5.95 million Chinese yuan ($1.1 million).

A verse that echoes Australia’s recent “smashed avocado” debate, is sung: “I calculate that if I don’t eat, don’t drink, I could survive on 744.1 yuan a month, but I would need to save for 62 years”.

On Monday, Beijing authorities announced that single Beijing residents, and married couples who aren’t registered as Beijing residents, wouldn’t be allowed to buy a single-storey house in the city if they already owned an apartment.

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A local married couple, from this week, can only own one apartment and one house. Non-residents won’t be able to buy a single-storey house unless they have paid tax in the city for five years.

The latest measures target the sharp price rise in houses near prestigious public schools. The schools only accept children who live nearby.

The average two-bedroom, 90-square-metre Beijing apartment costs 8 million Chinese yuan, according to financial newspaper Caixin. Houses in rapidly gentrifying inner-city neighbourhoods cost significantly more.

Fast-changing mortgage restrictions mean Beijing families are reluctant to sell an apartment before they obtain a mortgage for a new home, in case the new loan is refused under new government rules, Caixin reported.

The tougher Beijing restrictions could fuel the boom in Chinese families looking to purchase homes in Australia. Real estate website Juwai has previously said Chinese home purchases in Australia are closely linked to sending children to Australia for education.

One in four new homes in NSW, and 16 per cent in Melbourne, are being bought by non-residents. Of these, 80 per cent are from China, said a report by Credit Suisse last month.

In January, a Chinese mother, Xuan Zheng, failed to have her application for a student guardianship visa upheld in the Administrative Appeals Tribunal of Australia on the grounds that her family “love Australia, have a big property, and don’t want to sell it”.

Mrs Zheng’s daughter was a student in Australia, but the mother told the tribunal the house in Melbourne was “too big for one person”. The tribunal ruled this was not sufficient reason for a visa.

Although the family moved to Australia when the daughter was 16, she was now 26, and capable of living on her own in Australia, the tribunal found.

Beijing authorities require a 60 per cent deposit for second home purchases, and last week announced that divorcees must wait a year before they are no longer regarded as second home buyers.

source”cnbc”