Many of Beijing's upwardly mobile suburban residents are taking advantage of cuts in interest rates and down payment requirements to move closer to the city's downtown area. Hu Yongqi reports.

When he received the ownership certificate for his new home, Wang Lin took a long, deep breath of relief; the six-month struggle to sell his old apartment and buy a new one had finally come to an end.

The 34-year-old IT engineer bought his first apartment five years ago in the northeastern Beijing suburb of Shunyi, which lies outside the Fifth Ring Road. Wang hoped that the nearby subway line, opened ahead of the 2008 Olympic Games, would shorten his daily commute to work.

To his dismay, the journey to his downtown office still took two hours, so he decided to exploit a series of cuts in interest rates and down payment requirements, and take on more debt, to buy a new home closer to the center. His new apartment is just a 15-minute walk from his office.

Wang's case is a mirror of the city's second-hand housing market. Last year, transactions featuring second-hand apartments hit 198,018, a six-year high and a year-on-year rise of 91 percent, according to the Beijing Municipal Commission of Housing and Urban-Rural Development.

Real estate agencies estimated that about 50 percent of those apartments were bought by people whose homes no longer met their requirements. The owners were upgrading to places closer to better resources, such as transportation, education and medical services.

Better locations

In Beijing, there is a huge disparity in public resources between the suburbs and downtown, which is home to a greater number of prestigious schools and hospitals. None of the city's top 10 hospitals are located outside the Fifth Ring Road, and just one of the 10 most-distinguished high schools is in Shunyi. Some remote suburbs don't even have a bus service.

On Jan 21, Xia Qinfang, deputy director of the Beijing Bureau of Statistics, said 11.27 million square meters of new apartments were sold last year, a rare year-on-year decline of 1.2 percent.

"Many second-hand apartments have the advantage of being in better locations than the new residential complexes. That's why the trade volume has soared by more than 90 percent," she said, adding that there is little free land within the Fifth Ring Road, which is partly responsible for the rise in sales of second-hand apartments.

Wang's company is located in the downtown's Chaoyang district, 25 km from his old home. The subway, which he thought would be fast and convenient, was extremely crowded during rush hours, especially after the line was extended further west. "The city is too big and I don't want to spend so much time being squashed on the train anymore. Five years of traveling like that is enough," he said.

Wang bought an apartment in Shunyi because he hadn't saved enough to afford a down payment in a downtown area. "At the time, I expected property prices to rise and I hoped the apartment would bring me a profit," he said.

His investment was successful; he received 1.5 million yuan ($230,000) in cash when the sale of the apartment was completed for 2.3 million yuan.

"I earned more than 600,000 yuan, and 1.5 million yuan was sufficient to pay the down payment for an apartment of the same size in the downtown as mortgages became easier to obtain," he said.