In China, which has fallen into a real estate slump, the ’95-year-old Judamdae’ product appears… Criticism of “the next generation’s burden”

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In China, which urgently needs to revitalize the real estate market for economic recovery, a product that allows home mortgage loans up to the age of 95 has been released. The loan period was extended to the age of 95 to reduce the repayment burden and at the same time enable the older generation to buy a house in line with the aging population. However, there are criticisms that the authorities are increasing the financial burden of the next generation as a policy, such as making sure that the borrower’s children are guaranteed.

zoom inAn apartment complex in Beijing, China. Some banks in China recently launched mortgage loans that can extend up to the age of 95. baidu capture

According to Chinese media Xinjingbo and Taiwan Central News Agency on the 19th, some banks in Beijing recently released products that extended the upper limit on mortgage loans to 95 years old. Anyone under the age of 95 can get a home mortgage loan when they meet certain criteria, and the maturity of the loan is extended up to the age of 95.

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Xin Jingbo, quoting an official from the Beijing branch of Chongxin Bank, said, “The sum of the borrower’s pension and the monthly income of the child (guarantor) must double the monthly repayment amount to be able to borrow until the age of 95.” It is known that such loan products have not yet been expanded to banks as a whole and are sold only at bank branches in some regions such as Beijing, Nanning, Ningbo, and Hangzhou.

In the meantime, Chinese financial authorities have recommended that the age of mortgage loans and loan maturity not exceed the age of 70. Considering that the authorities have a strong influence in the Chinese financial sector, it is difficult to say that banks have launched ’95-year-old mortgage loan products’ against the authorities’ recommendations. Some interpret that this may have changed the tone of the Chinese authorities. Chinese authorities and banks have yet to give an official explanation.

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Regarding the move by Chinese banks, the Central News Agency said, “It is aimed at stimulating demand from the elderly as it can ease the debt burden and induce home purchases,” adding, “Especially considering China’s rapid population aging, it will energize the real estate market. The goal is to infuse it,” he diagnosed. It is known that the share of the real estate industry in China’s gross domestic product (GDP) is around 25%. The real estate market is essential for economic recovery.

However, there are also criticisms that new mortgage loans targeting the elderly increase the burden on the next generation. This is because the elderly have a low ability to repay loans, so they must have their children as guarantors. If the old-age borrower fails to repay, the children must take over the loan. Among Chinese netizens, criticism is spreading, such as “a model of loans that will be passed down from generation to generation beyond children,” and “a loan product for 100-year-olds will be released soon.”

Beijing =

Source: Donga

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