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Consumer Attitudes towards Housing Needs - China - January 2018

“Young adults in China, eg post 90s, show a more welcoming attitude towards renting. However, that is because they are willing to spend more of their income in improving living quality when they are tenants. They still hold a strong mind-set at owning a property of their own. To attract them, showing empathy to the pressure they are undertaking and offering them chances to demonstrate identification, eg for their hometowns, is an opportunity.”

– Aaron Guo, Associate Director of Research, China

This report examines the following issues:

  • How post-90s react to housing needs?
  • Do tier one cities really have the highest housing spending?
  • How brands can connect anxious consumers?

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
        • Excluded
        • Executive Summary

            • The market
              • Figure 1: Square metres of residences and other commercial real estate sold, 2007-17(est)
              • Figure 2: Average price of residences and annual growth rate, 1998-2017est
              • Figure 3: Consumer expenditure and growth rate, by selected sector, 2017
            • The marketing
              • The consumer
                • Property purchase driven by fundamental demands
                  • Figure 4: Key driver of purchasing a property, October 2017
                • House location matters more for tenants
                  • Figure 5: Factors to consider when renting or purchasing property, October 2017
                  • Figure 6: Key drivers of buying property as an investment, October 2017
                • Young males receive help from parents in a longer term
                  • Figure 7: Parents’ involvement and contribution to children’s housing needs, by gender and marital status, October 2017
                • Affluent consumers have the highest mortgage/spending ratio
                  • Figure 8: Mortgage expenditure ratio and monthly personal income, October 2017
                • To see is to believe
                  • Figure 9: Housing information sources, October 2017
                • Post-90s become realistic on housing
                  • Figure 10: Percentage of ‘strongly agree’ of post-90s on selected housing attitudes, by gender, October 2017
                • What we think
                • Issues and Insights

                  • How post-90s react to housing needs?
                    • The facts
                      • The implications
                        • Do tier one cities really have the highest housing spending?
                          • The facts
                            • The implications
                              • How brands can connect anxious consumers?
                                • The facts
                                  • The implications
                                  • The Market – What You Need to Know

                                    • Average price has a nine-year straight increase
                                      • One of the fastest growing spending sectors
                                        • Exploring new solutions for housing demands
                                        • Housing Market Overview

                                          • Residence square metres sold is estimated to grow by 5% in 2017
                                            • Figure 11: Square metres of residences and other commercial real estate sold, 2007-17(est)
                                          • Residence sales reaches RMB 10 trillion in 2017
                                            • Figure 12: Sales value and growth rate of residences and other commercial real estate, 2007-17(est)
                                          • Average price has a nine-year straight increase
                                            • Figure 13: Average price of residences and annual growth rate, 1998-2017est
                                          • One of the largest spending sector is the house expenditure
                                            • Figure 14: Consumer expenditure and growth rate, by selected sector, 2017
                                        • Market Factors

                                          • Purchase restrictions
                                            • Housing benefits of tier two cities attract talents
                                              • Outstanding rental-to-price ratio
                                                • Property jointly owned by the government
                                                  • Property Tax is near the corner
                                                    • Newcomers in the rental business
                                                    • Key Players – What You Need to Know

                                                      • Demonstrate a sense of identification in marketing
                                                        • Increase efficiency by applying modern technology
                                                        • Marketing Campaigns

                                                          • Lianjia and Ziroom – ‘Live Better’ integrated campaign
                                                            • Targeting property buyers returning to hometowns
                                                              • Cross-marketing with lifestyle companies
                                                              • Who’s Innovating?

                                                                • Break the burden of time of space
                                                                  • Online ordering system
                                                                    • High-end property for the grey hair
                                                                      • Renovating solution for old community
                                                                      • The Consumer – What You Need to Know

                                                                        • The demand for marital house is robust
                                                                          • Young adults care the most about living qualities
                                                                            • High earners have the highest spending/income ratio on housing
                                                                              • Post-90s have a realistic attitude on house buying
                                                                              • House Purchasing Drivers

                                                                                • Living condition improvement is the fundamental demand
                                                                                  • Figure 15: Key driver of purchasing a property, October 2017
                                                                                • ‘Marital home’ remains a rigid demand
                                                                                  • Figure 16: Claim rates on the top two property purchase drivers, by gender and age group, October 2017
                                                                                • School district properties are considered more in lower tier cities
                                                                                  • Figure 17: Percentage of purchasing property for children’s education, by city, October 2017
                                                                                • Undereducated parents value school district properties the most
                                                                                  • Young males who live with parents start to prepare for their future
                                                                                    • Figure 18: Claim rate on purchasing property ‘as an investment’, by housing situation, October 2017
                                                                                • Consideration Factors

                                                                                  • Different top demands for tenants and purchasers
                                                                                    • Figure 19: Factors to consider when renting or purchasing property, October 2017
                                                                                  • More price sensitive while renting than buying
                                                                                    • Figure 20: Claim rate on considering price during renting, by monthly household income, October 2017
                                                                                  • Post-90s care about living quality the most in both renting and buying
                                                                                    • Figure 21: Factors considered when making decisions on renting, by generations, October 2017
                                                                                    • Figure 22: Factors considered when making decisions on purchasing, by generations, October 2017
                                                                                  • Home appreciation and level of decoration are valued by investors
                                                                                    • Figure 23: Key drivers of buying property as an investment, October 2017
                                                                                • Decision Makers and Funders

                                                                                  • Young females are more independent at making rental decisions
                                                                                    • Figure 24: Decision makers involved in renting, by gender, October 2017
                                                                                  • 13% of post-90s get financial supports from parents when renting
                                                                                    • Figure 25: Rental payment contributors, by selected generations, October 2017
                                                                                  • Property purchasing involves partners in most cases
                                                                                    • Figure 26: Decision makers involved and numbers of decision makers, by renting and purchasing, October 2017
                                                                                  • One third of post-90s pay down payment with the help from their parents
                                                                                    • Figure 27: Property purchasing payment contributors, by down payment and mortgage, October 2017
                                                                                  • Differences between raising a son and a daughter
                                                                                    • Figure 28: Parents’ involvement and contribution to children’s housing needs, by gender and marital status, October 2017
                                                                                • Housing Expenditure Ratio

                                                                                  • Tenants spend an average of 22% of monthly personal income on renting
                                                                                    • Figure 29: Renting expenditure, October 2017
                                                                                  • Post-90s have the highest rental/income ratio
                                                                                    • Figure 30: Renting expenditure, by generation, October 2017
                                                                                  • An average of 37% of monthly personal income is for mortgage payment
                                                                                    • Figure 31: Mortgage expenditure, by monthly personal income, October 2017
                                                                                    • Figure 32: Mortgage expenditure ratio and monthly personal income, October 2017
                                                                                  • Are tier one city young people spending the most on housing?
                                                                                    • Figure 33: Ratio of monthly income paid on mortgage, by city and generation, October 2017
                                                                                • Information Sources

                                                                                  • Relying more on traditional vertical channels
                                                                                    • Figure 34: Housing information sources, October 2017
                                                                                  • Informative 80s
                                                                                    • Figure 35: Housing information sources, by gender, October 2017
                                                                                  • Agencies are more welcomed by renters
                                                                                    • Figure 36: Sources of housing information, by renters and purchasers, October 2017
                                                                                  • Different consideration factors lead to different information channels
                                                                                    • Figure 37: Housing information preference against total (as benchmark), by selected consideration factors, October 2017
                                                                                • Attitudes towards Housing

                                                                                  • Property ownership provides a sense of security
                                                                                    • Figure 38: Attitudes towards housing, October 2017
                                                                                  • Post-90s become realistic on housing
                                                                                    • Figure 39: Percentage of ‘strongly agree’ of post-90s on selected housing attitudes, by gender, October 2017
                                                                                  • Self-deceptive property non-owners
                                                                                    • Figure 40: Gap between property non-owners and owners (as benchmark) on the ‘any agreement’ of selected housing attitudes, October 2017
                                                                                • Meet the Mintropolitans

                                                                                  • MinTs pay more attention to the neighbourhood
                                                                                    • Figure 41: Gap between MinTs and Non-MinTs (as benchmark) on purchase consideration factors, October 2017
                                                                                  • MinTs spend higher on both rent and mortgage
                                                                                    • MinTs also value online comments
                                                                                      • MinTs are proud of their living conditions
                                                                                        • Figure 42: Gap between MinTs and Non-MinTs (as benchmark) on the claim rate of ‘strongly agree’ on housing attitudes, October 2017
                                                                                    • Appendix – Methodology and Abbreviations

                                                                                      • Methodology
                                                                                        • Abbreviations

                                                                                        Consumer Attitudes towards Housing Needs - China - January 2018

                                                                                        US $2,552.20 (Excl.Tax)