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BIZCHINA / Biz Life

Life more difficult for most home buyers

By Tu Lei (chinadaily.com.cn)
Updated: 2007-07-23 10:34

Five cities saw a double-digit growth in prices for new homes. Shenzhen
led the pack with a 12.3 percent hike, while Beijing witnessed a 10.3
percent increase.??

Eagerness to pay off loans as soon as possible may be a main attitude
towards the hike.?

“My first apartment’s monthly payments increased by 20 percent after
the bank raised interest rate in 2004, and I will be forced to pay off
the debts in advance because of the new interest rates,“ said a girl
surnamed Qu.?

She bought a 50 square meter apartment, her second property, near the
North Fourth Ring Road in Beijing, with a price of above 8,200 yuan for
per square meter. She borrowed a bank loan of 160,000 yuan.
But it seems she is not worried about the hike. “I can add my income
with proceeds from stock and fund investments, which can offset the
losses.” said she.?

“The possible hike has little impact on my living, because the money is
taken from my bank card directly. But yesterday I talked with my wife,
and we planed to pay off all loans by the end of this year, then things
will be better,” said Mr. Yang, another home buyer.??

“I feel nothing about the possible interest hike, for you still own
bank a lot of money. The truth is that when you are heavily in debt, the
total amount is unimportant,“ said Zhu Bo, a girl who also bought a 64
square meter apartment near North Four-Ring.??

She loaned 420,000 yuan from the bank, and the monthly payment is 2,983
yuan.??

Zhu Bo is not alone. Many buyers have apathetic attitudes towards the
hike. In fact, they are almost numb in some instances.??

“I do not care about interest rates too much. For now, I can only try
to pay it,” said Zhang Weide, a teacher in Beijing Union University. He
loaned 400,000 yuan and will pay 2,800 yuan monthly for 20 years. “The
hike targets all the buyers, and I am not alone.”?

Investors have a different attitude.?

“Increasing interest rates is a macro-control policy by the government.
The growth of interest rates is far behind that of housing price, so real
estate still can get a good return,” said a sales manager surnamed Zou
in an IT company,?

Last year, he bought a 107 square meter apartment in Tongzhou District,
east of Beijing, for investment. The housing price increased to 7,000
yuan from 5,000 yuan when he bought.

(For more biz stories, please visit Industry Updates)

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