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Think Chinese home prices are high? Try buying a grave
[HONG KONG] Escalating home prices in China may be making it an ever more expensive place to live but pity the sick and elderly: It's also becoming an increasingly less affordable place to die.
Grave prices have outpaced home prices in every one of the past three years, according to Fu Shou Yuan International Group Ltd, China's largest publicly traded operator of cemeteries and funeral facilities. The cost of an average plot, roughly the size of half a yoga mat, has surged 41 per cent since the first half of 2015 to 100,483 yuan (S$20,200). A gauge of home prices in 70 Chinese cities advanced 23 per cent over that period.
Fu Shou Yuan filings show that's about 112,545 yuan per square meter in 2017 - double the 56,196 yuan per square meter it costs to buy an apartment in the southern metropolis of Shenzhen, China's most-expensive city.
"Supply is very limited," said Hao Hong, a chief strategist at Bocom International Holdings Co. "We've heard about some people who bought flats in Shanghai to store cremains instead of expensive graves."
Shanghai-based Fu Shou Yuan, whose name translates to ‘good fortune longevity garden,' sold 6,214 graves across China in the first six months of 2018 with the average unit price rising 7 per cent year-on-year.
Land that's used for graves has so far escaped the long arm of China's regulators, said Yan Yuejin, a property analyst at China Real Estate Information Corp. in Shanghai. "That's partly fueled the soaring prices."
Beijing has imposed various property curbs over the years in an attempt to cool the housing market but needs to ensure there isn't a sudden decline in home prices that could harm the broader economy. By some estimates, real estate accounts (directly and indirectly) for as much as 30 per cent of gross domestic product.
China's so-called crude death rate - which refers to the number of deaths occurring throughout a year, per 1,000 population - was 7 in 2016, down from 25 in 1960, World Bank data show.