Mortgage loan as a means of home finance in Urban China: A comparative study of Guangzhou and Shanghai

This paper examines home financing in China, using data from household surveys conducted in Guangzhou and Shanghai. The nationwide Housing Provident Fund is still of minor importance. The majority of homebuyers continue to rely heavily on personal savings and parental contributions to finance home purchase. Mortgages are gaining importance, with slightly less than one-third of the purchases employing this means. Demographic attributes have relatively minor effects on mortgage loan utilisation. Socio-economic status is of somewhat greater significance; however, it exhibits contrasting effects in Guangzhou and Shanghai, which may be attributed to the difference in local housing market conditions. Migrants are discriminated by their hukou status. The findings show hukou status affects access to mortgage primarily through its impacts on the job market.