Homeownership rates for millennials in the U.S. have been steadily declining over the last decade, and nearly a third of them still live with mom and dad. But do you know where the so-called “American Dream” of homeownership is alive and well? China.
A study from HSBC found that some 70% of Chinese millennials are already homeowners, and 91% of them plan to buy a house within the next five years. China had the highest millennial homeownership rates out of the nine countries included in the study, followed by Mexico (46%) and France (41%).
As reported in the South China Morning Post, the high rate of home ownership among younger Chinese could be due to the cultural value placed in owning your own property, relatively high incomes for young people, or the one-child policy allowing parents to devote resources to one offspring, according to analysts. Despite skyrocketing housing prices in major Chinese cities such as Beijing and Shanghai, many smaller Chinese cities are still affordable for young people. Some young Chinese people can earn higher incomes in second and third-tier cities and then buy cheaper properties in their smaller home towns.
With a millennial homeownership rate of 35%, the United States was in the middle of the pack with Malaysia (also 35%). The countries with even lower proportions of millennial property owners included Canada (34%), the U.K. (31%), Australia (28%), and the United Arab Emirates (26%).
The study, which surveyed over 9,000 millennials in nine countries, found that the biggest barrier for aspiring young homeowners was the down payment: Some 69% of respondents said that they don’t have enough money for a deposit.
On the flip side, for those that do own homes (about 40% of total respondents), parental support was a factor. According to the study, 36% of millennials who’ve purchased homes turned to the ‘Bank of Mum and Dad’ as a source of funding. As the BBC explains, in China, particularly, parents fund “marital houses” for sons to increase their chances at marriage, as well as invest in property in their children’s names.
“This study challenges the myth that the home ownership dream is dead for millennials around the world,” said Louisa Cheang, HSBC’s Global Head of Retail Banking.
“With four in ten already owning their home, the dream of home ownership for millennials is definitely alive and kicking. The greatest challenges are in those countries where there is a perfect storm of stagnating salaries and rising house prices—for millennials in those countries, the dream, while not dead, looks set to be deferred.”