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China / Society

Spring Festival brings rural property mini-boom

(Xinhua) Updated: 2016-02-17 21:54

BEIJING?-- For many Chinese rural migrant workers, the Spring Festival holiday is a chance to buy their own home where they can eventually settle down in small counties.

This year, 43-year-old Li Yingrong decided to end a decade of rootless life selling snacks in the streets of Kunming and spend all of her and her husband's savings on an apartment in a small county in Sichuan Province in southwest China.

The couple and their two sons prefer to live somewhere busier than their nearby rural hometown and took out a 200,000 yuan ($30,000 dollars) mortgage with a monthly repayment of 1,000 yuan.

The deal, Li said, included 15 percent discount on the price and two complementary household appliances. "It's a transient life as migrant worker, but there are many factories here now and we can find a job nearby," said Li. She estimates that about 90 percent of buyers in the area are migrant workers.

In Hubei Province, 1,200 km east of Sichuan, migrant workers were also found hectically viewing apartments during the holiday. Promotions specially tailored for them such as "zero down payment for returnees" were widely available.

In Laohekou, a small Hubei city, property consultant Gu Che said that although the local government had ruled that the minimum down payment should be 20 percent of the price for a first-time buyer, developers offered to pay on account to capitalize on the boom.

In Hong'an, a county of only 100,000 people, residential developers even gave free train tickets and red envelopes filled with money to prospective buyers, plus an offer of 10,000 yuan in cash.

HOME IS WHERE THE BARGAIN IS

China's housing market has been heading south since 2015 due to weak demand and over-supply, especially in smaller cities.

Settling down, even in small cities, can still be difficult for migrant workers from rural parts. Banks are particularly cautious, as mortgages need a reliable income that requires them to find steady jobs quickly. Most migrant workers do not have social security or access to government housing funds, which also puts them at a disadvantage in loan applications.

The small city of Huanggang in Hubei has more than 15,000 vacant apartments, or 1.64 million square meters of commercial housing, according to the local housing management department.

Liu Enjun, CEO of a Huanggang real estate enterprise, said that competition was particularly fierce at the bottom end of the property market, as demand was weakened by affordable government housing schemes and the urbanization drive that focuses on bigger cities. Now, as more migrant workers decide to settle down near their hometowns, he expects the market to pick up.

In 2015, about 2.4 million migrant workers returned to their hometowns to set up businesses. For them, buying homes in third- and fourth-tier cities not only means a discount, but better education for their children. Single people are also buying homes before they marry.?

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