China is scrapping its one-child policy. Chinese official media announce Thursday that All Chinese couples will be allowed to have two children after a meeting of top officials, according to Business Asia One. This move then has lifted property developer stocks Friday with optimism that this could increase housing demand. The timeline on how this move could drive the housing demand but it is already speculated that the increase in the size of Chinese family could raise demand for bigger homes.
Shanghai housewife Tracy Li believes that she and her husband will be getting for a larger house once their two sons, 4 and almost one year old, have grown older. Currently they are living in an apartment with two bedrooms in Shanghai's Minhang district. They actual concern is not really on the children having their separate rooms but rather the grandparents. In China it is important to accommodate their elderly folks who are closely involved in childcare.
Mrs. Li reported said, "When the children are older, it's not too good for them to share a bedroom with their grandparents when they come over."
According to the Wall Street Journal, stocks of Chinese property developers increased Friday after the announcement that the policy was changed late Thursday. An index of Chinese-listed property developers followed by Shenyin Wanguo Securities increased to 0.2% on Friday, outdoing the 0.1% drop in the Shanghai Composite Index. Shares of China Vanke Co., the world's largest residential real estate developer in terms of revenue, increase by 0.4% to 13.67 Yuan while shares of Poly Real Estate Group gained 0.7% to 8.72 Yuan.
But analysts have warned that it still depends on how many families would actually have a second child. In 2013, Beijing reportedly has eased the two child policy but unexpectedly increases in birth was not much.
