Popular Public Investment in China
2 min readApartments and houses sold as commodities are rapidly becoming the most popular form of general public investment.As housing prices have maintained an upward momentum over the past years，many believe that bricks and mortar represent the most value-steady and value-adding form of investment.The wealthy would consequently prefer to invest in a second or even a third apartment than，say，stocks and shares，and young light-pursed first-time buyers would far rather take out a mortgage on an apartment than rent one.Purchasing trends at both ends of the property market have hiked up already high real estate prices.
Zhang Yuanyuan，a 1998 university graduate，works at a foreign company in Beijing.She is seriously considering moving out of her rented accommodation and buying her own apartment.She explains，”Living in a rented apartment makes me feel like a homeless drifter.What’s more，my current monthly rent is almost as much asthe monthly repayment on a 20-year mortgage would be.”There are many others likeZhang Yuanyuan who plan to buy their own apartment because it is more economical than renting one.
Property purchases by young people，however，are easier said than done.Some succeed with the help of their parents，others by getting a mortgage.The average Beijing citizen needs to save every cent of their salary for 27 years before they can afford a 90-square-meter apartment.In 1991，Shanghai followed the example of Singapore in introducing the Public Housing Accumulation Fund system，which makes it easier for people on average incomes to afford their own housing.The system has since gone into force across the entire country.It works by pooling the financial resources of the government，the work unit，some of which provide their employees with housing subsidies，and the individual buyer.Says Ma Yu，who works for a subsidiary of China Telecom，”My monthly salary is not high，but my unit offers a monthly housing subsidy of RMB 2000.This，plus my monthly quota from the Public Housing Accumulation Fund，is more than enough to keep up with my monthly mortgage repayments.”
The majority of Chinese housing investors that take out mortgages，however，risklosing out on their investment once house sales exceed demand.
