Source: South China Morning Post —
Alfred Chen, a 44-year-old engineer in Hangzhou, had been thinking about moving to a bigger home and taking his parents with him. An extra bathroom for the elderly parents would be great, he thought.
He had kept an eye on the property market over the past year, and figured that he would need an extra 500,000 yuan (US$72,227) for that.
But, given his age, he could at best get a 26-year mortgage, rather than the longest 30-year plan. In China, most big banks take a cautious approach and tend to cap the age limit and mortgage terms at 70 to 75 years. He stopped entertaining the idea.
But an unexpected call from his property agent last week prompted him to change his mind again. The agent told Chen he might be able to extend his mortgage term from 26 to 30 years, and take out 3.5 million yuan instead of just 3 million yuan.
“I can either get a bigger home with a bigger mortgage, or slash our mortgage payments each month to ease the pressure,” said Chen, an employee at a state-owned manufacturing firm.
Chinese banks are now eyeing a new group of homebuyers like Chen, the middle-aged and the elderly, to boost demand in the market.
The trend seems to be in line with China’s ageing population and a proposal to extend the retirement age from 60 to 65. China will be home to 402 million people aged 60 by 2040, making up 28 per cent of its population.
The life expectancy for mainland Chinese men is 74 and 80 for women, according to the World Health Organization, versus the global average of 73. The National Health Commission in Beijing said life expectancy for the Chinese people was 78.2, according to a 2021 report.
More likely, the loan incentive reflects the needs of China’s housing market.
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