To buy or not to buy? Twenty-five-year-old office worker Lin Xing had been pondering this question regarding an apartment for a while. In 2020, right after graduating from college, he moved to Shanghai with just one suitcase, determined to work and settle in the city.

Lin laid out his first major life plan—to secure an apartment in the megacity within the next six years at the latest. He didn't have any savings yet, so to save up for a down payment, he found a roommate to share rent with. He was frugal, carefully tracking every expense besides groceries and commuting costs—his spending was limited to the bare essentials.

It wasn't until this past Chinese New Year in February, when he got married, that the need for a home became urgent. According to the policies at the time, since he didn't have a Shanghai hukou (household registration), he needed to contribute to the city's social security system for at least five consecutive years before being eligible to purchase a home outside the city's inner ring road. He had to put his home-buying plan on hold.

But on the evening of May 27, Lin came across an online news snippet about a new policy change: The mandatory social security payment period had been reduced from five years to three, and the down payment percentage had been lowered by 10 percent. Excited by this development, he couldn't sleep that night. Early the next morning, Lin calculated his savings and started searching for properties.

Over the next three days, he viewed close to 40 apartments. "I'm so close to having my own home now. I'm filled with excitement, not at all tired from all the searching," he told local news portal Shanghai Observer.

Recent months have seen changes to home-buying policies in many Chinese cities. These policy shifts have spurred potential homebuyers to take action.

Sense of security

One Chinese saying goes, "No Home Without a House." The country has a strong cultural emphasis on homeownership, rooted in traditional values that prioritize family, stability and building wealth. Owning a property is often viewed as an important milestone or even a marker of success. Plus, with long-term expectations of property value appreciation, many believe it's better to own a home rather than to pay rent.

Many young couples and families prefer to buy a home, even if it means delaying other life goals or taking on substantial debt. It was long common practice for prospective homebuyers to save up a sizable down payment, sometimes as high as 30 percent or more, before committing to a purchase.

Beyond financial investment, homeownership also provides a competitive advantage in the dating market. Moreover, families also buy homes to offer their children good educational opportunities. Homes within the school districts of prestigious public schools are highly sought after.

Recently, to address the challenges faced by homebuyers and stimulate the property market, several cities have implemented measures to make home purchases more accessible, e.g., reducing down payment requirements, lowering mortgage interest rates, and offering subsidies.

For example, on June 26, Beijing announced a series of measures, including lowering the minimum down payment for individuals' commercial residential mortgages for first-home purchases from 30 percent to 20 percent, and lowering the lower limits of mortgage interest rates. On May 27, Shanghai announced similar policies, as well as a further easing of home-purchase restrictions for non-Shanghai residents and divorced couples, allowing families with two or more children to purchase an additional home, and more.

The new real estate policies implemented in first-tier cities are already starting to show initial effects. Activity in both the new home and secondary home markets in Shanghai, as well as Shenzhen and Guangzhou in Guangdong Province, has seen some increase, according to newspaper China Economic Times.

Take Shanghai as an example. In June, the property sales volume in the first 24 days already surpassed the total volume of March, which had also seen a boom. June also recorded the highest monthly transaction volume in the first six months of the year.

Although the measures in Beijing were implemented not long before the time of writing, the number of property viewings has been already on the up, as home buyers who had previously been holding back started to enter the market. "Since the policy was announced in Beijing, more clients contacted me, showing a keen interest in buying an apartment. Those struggling with the down payment, especially young buyers, can benefit from the new policies," Zhen Xiaoxia, a local real estate agent, told Beijing Review.

Riding the tide, Lin bought his home in June. Now he has a new life plan—to earn money to repay the loan and finish decorating the apartment in two years. "And settle down by the age of 30," he said.

More alternatives

Wu Huahua, a 26-year-old Beijing office worker, is in no rush to purchase her first home. "I'm looking and seeing if I should rent an apartment or just buy one. The monthly rent can roughly equal the monthly loan payment, and the only issue for me is the down payment, for which I can ask my parents for some support," she told Beijing Review. "But I'm also waiting to see if more favorable policies are launched soon."

Recently, the topic of whether young people should rent an apartment for life or buy one has become a hot topic online. Some people believe that renting a house has too many uncertain factors and it is better to buy one. Others hold the opposite view, stating that they do not want to carry a mortgage for decades and would rather rent a house for life.

A survey released by China Youth Daily newspaper and questionnaire website Wenjuan.com asked 1,512 young people aged under 35 about their views on the topic.

The results showed that 67.1 percent of the surveyed youth stated that they must have their own housing by the time they want to start a family, 12.9 percent said it is not necessary, and 20 percent believed "it depends."

"I prefer renting because of the flexibility. I can change places according to my work location. Plus, I can live in an apartment that is too expensive for me to buy for now," Zhang Yi, a Shenzhen professional, told Beijing Review.

However, there are also potential problems people may face when renting an apartment, including high rents, a lack of long-term stability, and lease terms and restrictions that limit a tenant's flexibility, such as restrictions on pets, renovations and number of occupants.

China has accelerated the construction of government-subsidized rental housing projects since the start of this year to solve housing difficulties. To expand the supply of such housing, the Central Government has been encouraging local governments to build affordable rental housing in industrial parks and around rail transit stations.

Copyedited by Elsbeth van Paridon

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