"Subsidies Offered, Urging University Students to Buy Homes" - The True Intentions of the Chinese Government...

Low Purchasing Power Among Youth Amid Worst Unemployment
"Encouraging Home Purchases Under Children's Names"
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As China continues to introduce policies easing real estate regulations to stimulate the economy, local governments are encouraging university students to purchase homes by providing subsidies.

According to China News Weekly on the 14th, recently, Shenyang, the provincial capital of Liaoning Province, decided to offer a housing purchase subsidy of 200 yuan (approximately 37,000 KRW) per square meter to university and vocational high school students who acquire new apartments. Additionally, full exemption from housing purchase acquisition tax will be provided to university graduates within the past five years. Shenyang is home to 45 universities and 76 vocational high schools. The number of university students reaches 806,000, while vocational high school students number 83,000.

However, considering that students generally lack the financial capacity to purchase homes, some analysts interpret this policy as encouraging parents to buy homes under their children's names. Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, stated, "The funds for homes purchased by students inevitably come from their parents."

This appears to be an effort to activate home purchases under children's names, taking into account the common Chinese custom of parents buying homes for their children upon marriage, and to revitalize the sluggish real estate market.

[Image source=Pixabay]

Local governments in China have long provided subsidies worth tens of thousands of yuan to highly educated individuals with university degrees or higher who have found employment or started businesses locally to stimulate the real estate market and attract talent. For example, Harbin in Heilongjiang Province has been offering a 30,000 yuan subsidy to university graduates and farmers purchasing homes since February. However, facing the real estate crisis, the scope of subsidy recipients has been significantly expanded to include current students and the unemployed.

There also seems to be an intention to prevent the outflow of young people by encouraging them to purchase homes locally. This is because the young population residing in the economically underdeveloped Northeast Three Provinces (Liaoning, Jilin, Heilongjiang) has been migrating en masse to the eastern coastal and southern regions, leading to a notable population decline, such as Harbin’s population falling below 10 million for the first time in a decade in 2021.

Meanwhile, China has recently introduced a series of measures to revive the sluggish real estate market, including easing housing purchase requirements and lowering mortgage interest rates.