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For most Chinese people, owning a home is an extreme priority (though "owning" really means "a 70 year lease from the government.")  In the West, owning a homeis a big priority, though not essential.  In the Western mentality, houses are for owning, apartments/flats are for renting.  And since there are very few houses in China, most Westerners are happy to rent when they come to China to live, even if they're going to be here for a long, long time.

A few months after my wife and I got married in February 2009, we decided it was time to buy a home.  I was well aware of the Chinese inclination (read: obsession) with home ownership, and this is actually a valid perspective in China, where distrust and paranoia of being cheated reign supreme, and no one wants a landlord literally lording over you.  I was also aware of the huge responsibility and cost that comes with purchasing a home.  But we decided to take the plunge nonetheless, and so far, I'm glad we did.

For one thing, it makes my wife very happy, and happy wife=happy life :-).  But seriously, women crave stability, particularly in China, and while my wife isn't like the hordes of money-minded materialistic sirens prowling around, having a home to call your own is a big relief. 

Another reason is the investment opportunity.  We live on Xiamen Island for the time being while we're waiting for our new home to be constructed, but our new home is outside the island, on the mainland.  This means its drastically cheaper and quieter than if we had purchased a home on the island.  It's still only a 45 minute bus ride and if we get our own car, a 20 minute ride back to the island, which is the hub for Xiamen's shopping, restaurants, and nightlife.  There are several shopping centers, parks, etc. around where our new home is, but it's still mostly countryside.  But that is actually what we would like, since Xiamen Island is quickly becoming too crowded.  Right now, the home we are renting is right next to Zhong Shan Road, Xiamen's top tourist hot spot, and while the convenience is nice, the crowds and traffic is not.

So, back to the investment opportunity.  As I said, our new home is waaay cheaper than on the island.  It's on the 21st floor, 90 sq. meters, two bedrooms/one bath, looking out to the sea, though there are some industries and businesses around the building, but no smoke stacks or pollution.  It's also right across from a yet-to-be-finished bridge that will let me zip over to my university in about 15 minutes.  All this for 2990 RMB/sq. meter.  That's right.  We put down our deposit in May 2009, and already it has appreciated to over 4200 RMB/sq. meter.  As I said before, it's still in the countryside, but there are several developments and apartment complexes going up around it, so in the next 3-5 years, that area will probably be a decent suburb of Xiamen.

Now I often have people asking me about the process of buying a house, so let me share my experience.  My wife and I are quick decision-makers, and we were lucky enough to find this home that suited us, was in a good location, and had a great price, so we jumped right in.  The down payment was a bit of an expense, and we used my wife's savings for that, since I had drank, shopped, and traveled away most of my money in my three previous years in China *looks sheepish.*  I chipped in a bit though too.  The law stated that if a house is under 90 sq. meters, then the down payment is 20% of the total house value, if over, then it's 30%.  Our home came to around 89.40 sq. meters so we just bared squeaked in at the 20% mark.

Getting the loan from the bank was a bit of a nail-biter, since my wife didn't have a job, but we couldn't tell the bank that I, her husband, did have a job and was therefore capable of repaying the bank, since the bank wouldn't give her the loan if they knew that we were married.  The reason is that the bank would be naturally squeamish about loaning money to a Chinese person with a foreign spouse, since the couple could easily take the loan, make their purchase, and then zip off to the foreigner's home country, leaving the bank empty-handed.  But since my wife also owned a small storefront that she rents out, the bank saw her as low-risk (and still single), so they granted the bank loan to her at a fixed interest rate. 

I thought this was interesting but understandable.  From what I hear, foreigners can only own one piece of property in China, usually a factory or other business.  I'm a teacher, not a businessman, so I don't need to worry about this, but without something significant tying me to China, the bank wouldn't give her the loan, so we needed to keep our marriage under wraps.

So now we've got a ten-year mortgage at a fixed rate, and the payments are quite reasonable, only about 20% of my monthly income.  My wife doesn't work (her current job is incubating our little bundle of joy, due to arrive in August).  The construction should be finished in July of this year, but all we're really getting is an empty concrete box.  We have to take care of all the interior design ourselves, which is what we're saving up for at the moment.  We expect to move to our new home by next summer.  All in all, it's been a relatively low-stress situation, and I really feel that we got lucky.  I would encourage other married foreigners to purchase homes outside of large cities, since urban areas are severely over-priced, though this could change quickly.  Suburban homes tend to be quieter, less expensive, and the appreciation will probably be less erratic than city homes. 

I think purchasing a home is a good idea, especially if you're going to be in China for the long haul and plan to have a family here.  My wife and I expect that we'll stay in China until it's time for our child to begin his/her education, and a Western education is definitely the better choice- can I get an "Amen."  But even while we're gone, we can rent our home, and we'll always have a home to come back to.

In unrelated news, I haven't gotten a new tattoo in several months, so I went to the beach and got sunburned to get that peeling and itching feeling that I know and love so well.  Just thought I'd share.

 


Hopfrog
06/14/2010 04:56

Very informative! Thanks for posting this.

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06/15/2010 06:48

You're welcome. I actually haven't come across a lot of foreigners where I live who have purchased homes, but I'm sure there are a lot more in the larger cities. I can't imagine the headache that would be.

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10/17/2010 21:35

Difficulties are language, distance, and the rumor that they're shortly going to restrict foreign property ownership "for business purposes" to protect their own people from unaffordable price rises for locals. I think you just have to be very careful and do your research. 6 years ago I guess I was just too scared to take the plunge, which to a certain degree I do regret now.

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10/25/2010 06:42

Actually I don't own the house, it's in my wife's name, so I don't expect any problems from that. China's been taking several steps recently to try and cool off the housing furnace, though urban homeownership is still an unattainable dream for most of the Chinese population. Research and caution are indeed essential.

Right now our home's interior is nearly completed, with the ceiling, walls, flooring, piping, and wiring pretty much done. We expect to move in about two months later.

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sonam
09/04/2011 10:31

Hi...I really found this bolg of yours very informative.As I am Indian girl and getting marry to my chinese bf in Beijing.We are little bit nervous to buy house in Beijing because he is from other province but he does have (HUKOU) stating that from past 5 years he is paying taxes .Would you please tell me that is it still like this that if we buy house lesser than 90sq we need to pay 20% as downpayment and like you do I need to show that my bf is single...????hehehe I know its kind of inquiring but..your kind suggestion would definitely going to help me in settling myself.Best of luck for your life...and lots of health to your wife.

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09/04/2011 17:53

Hi Sonam. Congratulations to both of you. Well from what I've heard, house-buying rules differ from city to city, province to province. We bought our home two years ago and in China, everything can change in two years. I would imagine that the rules are even more strict now since the government wants to make sure that housing prices don't run away more than they already have.

I would suggest that you and your fiance go look at several houses and ask the salesperson what the price requirements are. If different places give you different answers, then they might be trying to cheat you, but if everyone gives you the same answer (down payment percentages, taxes, etc.), then you'll just have to go with it. Good luck!

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