The Ninepower Marketing Consultant Co., Ltd recently announced its estimate and survey of the 2005 Beijing residential property market. The survey shows that young people aged 25 to 28 are the backbone of Beijing's property market. Except for those in high-paying jobs, certain young people who are out of work for several years, with meager savings, rely on borrowing from their parent's retirement nest egg to support the rapidly rising residential property prices.
Miss Li, who lives outside the No. 5 East Ring Road occupies a flat with over 80 square meters of space. Each square meter costs 3,210 yuan. The cost of the flat was paid in full upfront and the principal source of cash came from the parents of both the husband and the wife.
27 year-old Mr. Qiao bought a three bedroom flat at a price of 2,650 yuan per square foot. The 20% down payment came from his parents. The monthly mortgage payment was his burden to shoulder.
Ms. Ban Miaoqi is the person in charge of Beijing Horizon Group. The scene she observed in the property retail market was that buyers are becoming younger and elderly parents were usually right behind these young people. The most exciting scene was when both husband and wife brought along two sets of parents to look at property.
For this phenomenon, some in real estate uses the term of "Six One Formula", meaning six people put up the money to buy one flat. The six are the young couple, the husband's parents and the wife's parents. They all put up money to buy a flat in the city.
Yi Xianrong, economist of the Chinese Academy of Social Sciences, once said in a newspaper article that he hoped the media would warn these young people who spend their elderly parent's retirement nest egg to think thrice before taking action. He said that young people buying property must consider the risks of fluctuating interest rates and property prices and must consider the possibility of the young people losing their jobs and their parents losing their retirement and health care benefits.
(Chinanews.cn July 6, 2005)
