Want a second home? Have another child, Chinese told

The ruling communist party is now confronted with a rapidly ageing society and a population that is due to decline this year.

Alibaba’s annual cloud computing conference in Hangzhou. Picture: Getty Images

Families with three children are being allowed to buy a second home in an effort to boost the sluggish property market and falling birthrate.

After more than a decade of restricting families to one or two children, the ruling Communist Party is now confronted with a rapidly ageing society and a population that is due to decline this year.

It has offered families in more than a dozen Chinese cities a range of incentives to have more children, including banning for-profit after-school tuition, extending maternity leave and offering cash subsidies.

In the latest move, at least 13 cities, including Hangzhou in the east, announced that households with three or more children would be prioritised when new homes go on sale.

Hangzhou, a tech hub of 12 million people where big companies such as Alibaba have headquarters and property prices are usually high, had limited families to owning a single flat. The new policy is “worth emulating by other Chinese cities”, unnamed insiders told the state-run Securities Times newspaper, a signal that it may be extended across the country.

New home sales fell by nearly a third in the first quarter of the year compared with 2021, driven in part by a new round of coronavirus lockdowns that kept millions indoors.

House price growth declined or went into reverse across China’s 100 biggest cities and ­unemployment has broken 6 per cent.

Hangzhou once had one of the country’s strongest property markets, but flat sales fell by 1 per cent last month and the average price fell 2.5 per cent to $6530 per square metre.

As families shy away from the rising costs associated with bigger families, President Jinping Xi’s administration has encouraged local governments to explore solutions in education and taxation as well as housing.

Kai Feng, author of China’s Urban MegaTrends, said: “The high housing cost is one of the main reasons why the birthrate keeps falling. Many people are unwilling to have children or have postponed plans to have children exactly because they cannot afford a flat.”

Hangzhou’s new housing policy has been trending on Weibo, the Chinese social media site, but has been largely dismissed as of benefit only to the rich.

“Most people cannot afford raising one child and owning one flat, let alone the third child or the second flat,” wrote Geng Xiangshun, a Beijing-based blogger with four million followers.

“New policies such as the one in Hangzhou have nothing to do with ordinary people.”

The Times