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In building boom, no place like home

world Updated: Apr 23, 2010 00:01 IST
Reshma Patil
Reshma Patil
Hindustan Times
Highlight Story

This year, the term ‘naked marriage’ started appearing in the staid pages of China’s State-run newspapers and the Internet. Luo hun or naked marriage is how the Chinese refer to the trend of couples getting married without the traditional wedding feast, diamond ring, car — and critically — a new apartment.

Chinese analysts may disagree with hedge fund manager James Chanos’ controversial comparison of China’s property boom as ‘Dubai times 1,000 or worse’. But you know Beijing is worried about its failure to control property prices when it discusses social instability. An essay in the official media on Thursday said that decision-makers now believe that the housing crisis could cause ‘social instability’ if handled ineffectively.

Right after China posted nearly 12 per cent first quarter economic growth, the cabinet moved to cool the overheating economy by issuing the strictest property control measures since 2007.

Regional officials were held responsible for stabilising the ‘abnormally high’ property prices. Developers were warned of penalties for artificially hiking prices and hoarding.

Property prices in 70 Chinese cities rose 11.7 per cent in March, the fastest rate since 2005. Premier Wen Jiabao has compared the housing prices to a wild horse that must be tamed. A majority of professionals in the world’s fastest-growing economy cannot afford an apartment even on the capital’s outskirts.

Thousands of Chinese respondents in a recent online survey said they plan to exit big cities like Beijing, Shanghai and Guangzhou because of the costly, competitive lifestyle.

A Thursday poll linked the Chinese middle-class’ health problems to the housing crisis. Recent surveys rank China’s big cities lower on the happiness index than the less developed and cheaper cities.

“Achieving balance in China’s real estate market is the government’s most difficult task,’’ said the Global Times on Wednesday.

The latest rules curb lending for third-home purchases and require higher down payment and mortgage rates for property sales.

Developers will not be allowed to accept deposits to sell unfinished apartments without official approval.

Advertising professional Li Jie left Beijing for lesser-known Zhengzhou city in central China in 2006, because he couldn’t afford a post-marriage apartment. “As a traditional Chinese, I think a house is most important for married life,’’ he said. This year, he says, his apartment in cheaper Zhengzhou is worth the same price as the apartment he couldn’t afford in Beijing four years ago.