(ECNS) -- China's move to abolish the decades-long one-child policy has provided new hope for the country's housing market struggling with contracted demand as a result of an aging society.
Reports by National Business Daily suggest that decreasing numbers of youth and middle-aged people, the most likely home buyers, is pushing the market towards a growth ceiling after a decade-long boom.
According to the National Bureau of Statistics, China's workforce population, aged 15 to 64, has continued to shrink since 2011, from 74.5 percent to 72.8 percent in 2013. In the same year, the country experienced a year-on-year decrease in the 15 to 59-year-old group of 3.45 million.
Potential home buyers, aged 25 to 44 based on a Aj Securities analysis, correspond to the structural change. The group fell from 34.3 percent in 2003 to 32.4 percent in 2014, estimated at 440 million.
Analysts expect the two-child policy could drive up home sales as bigger families means both a need for larger houses and an enlarged group of future home buyers in the long run.
However, experts have also warned against too much optimism. A survey by People's Daily indicates that only half of the 90 million benefitting couples are willing to have a second child. Based on this, there will be an average of 7 million babies born under the program annually by 2028. That means an average yearly increase of home demand by 140 million square meters, only a slight share of the current annual home sales of 1.2 billion square meters.
Analysts say that hopeful booms will largely occur in third- or fourth-tier cities where the cost for raising a child is much cheaper. Meanwhile, larger houses will become the new hit.
