BEIJING (Reuters) - Meng Ni and Fan Zhiqing said “I do” to each other in the same month that they said “we do” to their real estate agent.
China is in the midst of a golden age of weddings, a boon for businesses from photo studios to global platinum miners. Yet nowhere is the economic impact so potentially profound as in the housing market.
A flood of newlyweds such as Meng and Fan buying their first homes could help power China’s property sales for years, even as some investors fear that prices are already in dangerous bubble territory.
“My husband and I preferred to have our own home rather than rent one as before, because marriage stands for a new start and we are building a family now,” Meng said, sitting in their tidy, studio apartment.
Their story may seem perfectly normal, even universal, at first glance. What makes it more powerful is that Meng and Fan are part of a demographic bulge of people in their twenties who will be of prime marrying age between now and 2015.
As these newlyweds shell out for their first homes, the property market will enjoy a fount of solid demand. Analysts estimate such couples could mop up as much as 450 million square meters of housing every year, or roughly 16 percent of all that is under construction at present.
Looking west from Meng and Fan’s window, clusters of new apartment buildings fill the skyline. To the east lies a flat, gray landscape of single-storey dwellings that is slowly being swallowed by high-rises.
“The apartments here are fairly small. They’re a perfect fit for young couples,” Meng said, estimating that three-quarters of her neighbors were around the age of 30.
These are the children of China’s baby-boomers, a demographic ripple effect of the country’s population surge in the 1950s and 1960s.
They would have been even more numerous had Beijing not launched its one-child policy in the late 1970s to cap family size, but they are still a bigger group than those immediately younger and older than them.
As it turns out, the controversial population controls have shaped their consumption habits. Showered with attention and gifts all their lives, this generation of only children keep their purse strings loose, unlike their parents.
“They have all grown up since 1980, during 30 years of fast-paced growth, so they don’t feel the same need for precautionary savings as their parents,” Xing Ziqiang, an economist with China International Capital Corp, said.
Nuptials give them a ready outlet for spending.
Not only are more people getting married, more of those getting married are choosing to have weddings — and lavish ones at that. The wedding industry is worth about 400 billion yuan a year, roughly a 2.5 percent contribution to gross domestic product, according to official estimates.
The Xidan Wedding Mall in the heart of Beijing offers three floors of dress makers, jeweler merchants and photo studios.
“A bride usually buys two gowns: a white one in the Western style, used for the procession and vows, and a traditional Chinese one in red for the banquet,” said Ying Zi, a saleswoman at Modern Bazaar, a dress shop in the mall.
A few years ago, brides often rented their clothes. Ying said almost all of her customers were now buying the dresses, which cost at least 2,000 yuan ($293) each.
Diamonds are also hot. Chen Yin’s family began crafting diamond rings at home for a niche market a decade ago. Now they run a shop, Bling Jewelry, selling hundreds a month.
“There are some people who originally bought small diamond rings, but are now looking to upgrade to bigger ones,” she said.
And brides have taken to platinum jewelry, because the white metal matches their white gowns. Its place in Chinese weddings has helped double global demand for platinum this year despite a sharp fall in use by the hobbled auto industry, according to precious metals refiner Johnson Matthey.
The choice of white is, in itself, an indication of the social change sweeping over China, where white was traditionally the color of funerals.
Then there are the wedding photos, shot against elaborate, if fake, backgrounds: a couple in 1920s attire on a French boulevard or in cowboy gear with a rugged Wild West landscape behind them.
The wedding boom has not escaped the government’s notice. The state-run China Association of Social Workers established the Wedding Industry Committee in 2003 to gather data and set standards.
The number of weddings, about 10 million in 2008, is increasing by 10 percent a year, while spending is rising 20 percent, according to Shi Kanning, the committee chief.
“The global financial crisis hit a lot of industries: exporters, banks, insurance. But not only was the wedding industry not affected, it has had even stronger growth over the past year,” Shi said.
This resilience, he said, spilled over to the property market, with newlyweds buying homes when other business dried up. He pointed to surveys by the China Index Research Institute, which show that three-quarters of first-time home buyers are below the age of 35.
But a surge in housing sales — up 79 percent by value in the year to October — is clearly about more than just newlyweds.
The economy is awash in cash after banks issued an unprecedented flood of loans to help combat the financial crisis. With few investment channels in China, property is alluring.
“Property prices are largely dictated by investors,” Zou Linhua, an economist at the Chinese Academy of Social Sciences. “Wedding-related home buying is only a part of the demand.”
Yet it is an essential part, Xing of CICC argues, so much so that the demographic implications need closer analysis.
In smaller towns, for example, where men outnumber women by a wide margin, families try to help make their sons more attractive by promising larger homes to potential brides.
The government needs to give serious thought to how to cushion a potential fall-off in housing demand at the end of the wedding boom, sometime around 2015, Xing said.
In the meantime, it is frugal parents, not the young couple and not banks, who often foot much of the bill for new homes. Armed with a lifetime of savings and with just one child because of the government’s population controls, parents are only too willing to lend a hand — and sometimes twice.
Wang Dajian and Niu Xiaoxia said they recently purchased a second Beijing apartment for their 29-year-old son and his wife after the first one they had bought failed to entice the young couple out of the parents’ home.
The newlyweds found the first apartment “inconvenient” for their jobs, their parents said, because it required a 30-minute commute from their offices.
“They should be independent. They should be responsible for their own lives,” lamented Niu, who noted that when she and Wang married they had to wait more than two years after marrying before their work unit arranged for a tiny one-room apartment.
“I want to push them out, to make them suffer a little like we had to,” Wang said with a wave of determination that quickly melted.
“But the problem is, when we see him suffer, we feel bad. I don’t blame them, because all this resulted from us. We are responsible because we spoiled them.”
Additional reporting by Ken Wills; Editing by Megan Goldin