China is offering mortgages to borrowers as old as 80 as lenders scramble to prop up the country’s beleaguered housing market following strict zero-Covid restrictions.
Several lenders across the country have extended their borrowing age in a bid to stimulate growth after property investment slumped by 10pc last year, the first drop since 1999. Sales of residential property fell by 14pc in January compared with a year earlier, according to data from 40 major cities compiled by China Real Estate Information.
The age limit has increased from an average of 65 to 70 years to one of the highest in the world – the UK in comparison has a typical maximum age of between 65 and 70 years.
For example, a 50-year-old home buyer can now get a 30-year mortgage. Under the previous rules, the buyer would have had to be under 40 to get a similar mortgage.
It comes after Xi Jinping loosened the country’s zero-Covid restrictions for the first time since the pandemic hit following nationwide riots in protest over the rules.
Bruce Pang, chief economist, Greater China at JLL, a real estate services company, said: “We think this is one of Chinese banks’ latest moves to revive the hard-hit property market, with tailor-made terms and creative solutions to attract more mortgage-seekers.
“Chinese leaders have reiterated that the property industry remains a ‘pillar’ of the economy. And we think the Chinese government will continue to implement measures to stabilise the property market, to improve expectations, to ensure the delivery of residential buildings, and to meet the reasonable financing needs of property developers.”
Evergrande Group, one of China’s largest property developers, has been at the centre of the country’s property crisis owing over $300bn (£248bn) in loans. Analysts at UBS estimate that China’s real estate slump will cost the nation’s banking system as much as $212bn (£170bn) in losses on loans, bonds and other assets.
Meanwhile, the country’s slowing economy is likely to be exacerbated by its shrinking population which dropped by 850,000 to just over 1.4 billion in 2022, according to the National Bureau of Statistics. It was the first decline since 1961 – the last year of China’s Great Famine.
China’s birth rate contracted to its lowest rate on record with only around 6 births per 1,000 people, down from just over seven births the year before.
