Chinese home ownership is soaring, and with it the emergence of a market for related products and services that is growing fast in sophistication.
Home ownership has traditionally been the dream of many in the West, and now it is much more within the reach of China's increasingly affluent urban middle class.
With home ownership, comes increasing consumer demand for household appliances, furnishing, decoration, and a mass of secondary consumer items and services as well as financial services such as loans.
Chinese news agency Xinhua reports today that "four out of five of China's urbanites own their own residences and 94 per cent own some form of accommodation, according to the Ministry of Construction"....
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As China's social housing system develops, a growing number of people, especially in urban areas, will purchase their own houses with a combination of funds they accumulate themselves, the equivalent amount paid by their work units for housing, and bank loans. The latest statistics from the People's Bank of China show that housing loans issued by China's commercial banks in 2001 were 32.55 times those in 1997.
Housing loans issued by domestic financial institutions totalled 663 billion yuan (US$80 billion) by the end of June. Housing loans have become a critical part of the credit consumption of the Chinese people.
Moreover, a recent survey shows that 48 per cent of Chinese citizens plan to purchase or swap houses in the next couple of years.
Sixty-seven per cent of the people who have bought public housing want to improve their living conditions by purchasing new residences or exchanging houses.
Low-rent or free housing used to be one of the benefits provided by the State or State-owned enterprises before the country launched its opening-up and reform.
But the cost of the system made it increasingly hard for governments at all levels to build more and better houses. It became a headache for city residents to find suitable housing.
The central government began to reform the housing system back in the mid-1980s by selling luxury houses at market prices, by providing middle-income families with cheaper housing, and by accommodating low-income residents in low-rent apartments.
Governments at all levels have provided various preferential schemes to improve living conditions in the world's most populous country.
Developers of affordable housing can enjoy 21 tax-reduction and exemption programmes if they keep their profit margins below 3 per cent.
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