|Shenzhen housing fund starts|
December 2010 marks the start of a housing fund in Shenzhen that is for the first time available to most workers in the city. Other cities such as Beijing, Shanghai and Guangzhou already implemented such a policy many years ago. The rules state that each employer has to contribute at least 5% of the employee's salary to a special housing fund account.
The employee also has to contribute at least 5% of his own salary to this fund. The fund can then be used by the employee for purchase, building, rental or reconstruction of residential homes. In Tencent the actual number will be 12% by both the company and the employee. According to our HR department, due to difficulties foreigners have on the housing market, they have decided to implement it differently for the foreign employees of Tencent. I will therefore not be able to benefit from the housing fund, but will get the same amount of money paid in addition to my normal salary. On one hand this is good, because I can immediately use the money, on the other hand I will also not be able to benefit from preferential mortgage policies related to the new housing fund. I don't know yet if the housing fund also has favorable tax policies, so employees need to pay less tax over the contribution to the fund.
More information on the website of the Shenzhen Housing Fund Management Center.
I think it's great that Shenzhen has finally implemented this policy, but I fear it's too little to offer people a real chance to own an apartment. Yesterday we walked back from the supermarket to our apartment and we passed a small real-estate agent. I noticed one price : 12 million RMB! That means it's over 1.3 million euro for one apartment close to our house. It was very big (about 250 square meter), and the location is also quite good (close to Coco Park), but the quality of living is nowhere near what you would get for 1.3 million euro in the Netherlands, Europe or probably most of the USA. It's about 50.000 RMB per square meter and no matter how you turn it, that's crazy. Housing bubble is still in full swing here. People earn on average about 4000 RMB/month in the IT-industry in Shenzhen. Even if you remove the low-paid jobs, by far most will earn below 10K/month. That means it will take half a year to earn 1 square meter. The housing fund will not even be able to make a small dent into this and one has to wonder how long it will go on like this...
Cost of living in Shenzhen
New housing fund regulation passed (Shenzhen Daily, English)
Chinese article with lots of details
|Last Updated ( Saturday, 11 December 2010 )|
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