(Yicai Global) June 1 -- Do you know where in the world 70 percent of millennials (those who were born between the early 1980s and the late 1990s) are homeowners? Surprise, surprise! It is in China, says HSBC, the banking institution and mortgage-lender. The home ownership rate among the world’s most crowded country’s millennial population is the highest in the world, shows the bank’s recent global survey.
While young people across the world are struggling to get on the property ladder, China’s youth seem to have found the magic formula. The HSBC report shows not only 70 percent of China’s millennials are already homeowners, 91 percent of those who haven’t been able to buy a house or apartment yet are considering to buy their first homes within the next five years.
There are some surprising factors behind this phenomenon. A combination of cultural, societal, psychological and individual reasons plays the primary role in it. First of all, China and Chinese culture place a high value on home ownership. Renting is not socially acceptable, particularly after marriage.
China’s underpopulated male population are also under pressure to own a home before attempting at marriage as it is one of the benchmark criteria to get your proposal accepted by your ‘dream girl’ and particularly her parents who have a major say in the process leading up to marriage and beyond.
“The Bank of Mum and Dad,” as they call it, plays the role of a main mortgage lender in the case of China’s millennials. It is almost custom that Chinese boys would provide a home ahead of marriage. By buying the house or apartment on behalf of their son, Chinese parents also invest in their pension years since there is a high probability that they would move in with their children in their advanced ages as a means of social security. Parents’ excellent saving skills acquired through hardship years also qualify them to easily help their children in that important milestone of their lives.
No matter for what reason, the end result seems to be a high societal achievement, elevating China’s millennials to score the highest home ownership rate in the world.