A Few Things About Buying a House in Haidian

On February 8, 2021, at 08:53, I, my girlfriend, and my parents were on our way to work. I finally made up my mind, said this is the one, and transferred a deposit of 100,000 yuan to the property developer. At this point, it had only been a month since we started looking at houses intensively.

Why the rush?

There are three contexts: First, Beijing requires a household registration or work residence permit to buy a house. Although I could have solved the household registration when I started my job after graduating with a doctorate in June 2019, the process was slow. I got the acceptance letter from the Beijing Municipal Human Resources and Social Security Bureau in December 2019, the household registration transfer certificate in September 2020, and my new ID card in January 2021.

Second, there are not many new properties in Haidian District, and demand exceeds supply. Although Haidian District has quite a lot of vacant land, the land released each year is very limited. Plus, Haidian District is home to the wealthy, such as major internet companies. The house prices in the core area are as high as over 100,000 yuan, and those outside the Fifth Ring Road are also 80,000 yuan. Some remote or shared property rights houses can be 50~60,000 yuan. Even such houses are sold out in seconds. For example, there are two properties near where I live (Haidian District, outside the Fifth Ring Road, Shucun). One is the luxury Yuanming Tiansong, which opened in November 2021, with 238 houses, the lowest total price is also 23 million yuan, sold out in 15 minutes, reportedly all paid in full; the other is the demand-improvement type Xuefu No.1 Courtyard, with more than 900 houses, the lowest total price is 11 million yuan, also sold out in one day. Obviously, I don’t have the financial strength to buy such a house.

Third, the down payment ratio in Beijing is very high, non-ordinary residences (houses in the city are generally non-ordinary residences) first set 40%, second set 80%, I was determined to be the second set because I had a loan record in my hometown, so the down payment ratio is as high as 80%, so it is impossible to buy too expensive a house. For me, the problem of taking on a loan is not big, according to the bank’s algorithm, I can take on about 12 million yuan in loans, but the down payment is the main bottleneck.

City Choice

Faced with such a high down payment, we mainly considered several options:

1. Buy a smaller house in a prime location in Haidian, and change houses later if there is a need to improve life. At this time, we need to consider mainly include the convenience of commuting, the comfort of living, and the investment property of real estate. Although many people are pessimistic about the property market against the backdrop of a low birth rate and economic downturn, I believe that there is still a strong rigid demand in prime locations in first-tier cities, and it is still in short supply.
2. Buy a slightly larger house in an ordinary location in Haidian or Changping District, basically one step in place in terms of area, and the house price is not expensive, generally 50~60,000 yuan per square meter. But Changping’s school district is not as good as Haidian’s, and if the household registration is moved to Changping, whether future policies will allow it to be moved back to Haidian is an unknown (currently it is possible to move freely within the city).
3. My classmates in Hangzhou basically all bought houses of more than 120 square meters, because the house prices in Hangzhou are only 3040,000 yuan per square meter (recently the increase is also quite fierce, it is already 4050,000 yuan), and Hangzhou’s down payment is the first set 30%, the second set 60%, much friendlier than Beijing. Hangzhou’s Binjiang is developing well, Huawei Hangzhou Research Institute and North Research Institute (Environmental Protection Park) also have a history of more than ten years, Hangzhou Research Institute is near Binjiang Internet Town, there are several good large shopping malls, Environmental Protection Park is mostly wasteland (hope it can be developed in ten years). I have been on a business trip to Hangzhou Research Institute for more than half a year, to be honest, my impression of Hangzhou is good, our engagement ring and wedding ring were bought in Hangzhou.
4. Because of work reasons, I went on business trips to Chengdu and Xi’an, both cities gave me a good impression, especially Chengdu’s life is slower. The house prices are a notch lower than Hangzhou. At the entrance of Yaotang Mansion in Chengdu, I often see various sports cars and luxury cars, the entrance is an international school, life is very convenient, it looks more like a big city than Shangdi and Environmental Protection Park in Beijing where I am. These colleagues earn about the same salary as me, but they live very comfortably in Chengdu and Xi’an, where the house price may be the most important factor. The first time I went to Chengdu Research Institute was at the end of winter and the beginning of spring, when the trees in Beijing were still withered, but the flowers were red and the trees were green in Chengdu Research Institute, with weeping cherry blossoms blooming in patches, reflecting in the lake. When we went out to play, we also went to Suzhou and other cities, the water towns of Suzhou in the south of the Yangtze River are also unforgettable.
5. My friends in the United States basically all bought houses, for example, in Seattle, a house of 180 square meters can be bought for 1 million US dollars, which is even cheaper than many houses in Hangzhou. Even considering the factor of rising house prices in Seattle (up more than 50% in a year), it is still only the price of a better house in Hangzhou, and most houses in Beijing, even in Changping, are more expensive. In addition, the area of a house cannot be directly compared with a house in China, because there is a lot of shared area in high-rise residences in China, for example, the house I finally bought has a shared area of up to 25%. Europe and the United States do not have such exaggerated down payment ratios. The comfort of living in a house is generally higher than that of a high-rise building. But choosing to stay in China is choosing a more competitive life. If considering going to Europe or the United States in the future, according to the income level of the same level of internet companies, the pressure to buy a house will be much less.

Huawei Chengdu Research Institute, late winter and early spring

I am not yet 30 years old, the road ahead is long, and perhaps many unexpected things will happen, it is hard to say that I will be in Beijing for a lifetime. Moreover, Huawei is an international company, not only has 10 research institutes in China (Beijing, Shanghai, Shenzhen, Dongguan, Hangzhou, Suzhou, Chengdu, Xi’an, Nanjing, Wuhan), but also has 26 research institutes in Europe, and research institutes are spread all over many other cities in the world. Although my girlfriend’s job is not yet settled, she is not attached to the soil. Therefore, my dilemma about whether or not to buy a house in Beijing is essentially planning for the future life.

Hangzhou Jiuxi Yanshu

Types of Real Estate

I started looking for a house at the beginning of 2020, when the pandemic had just begun to wreak havoc, and the sales offices in the capital were deserted. At that time, I learned that the real estate in the capital is divided into limited competition housing, joint ownership housing, and pure commercial housing:

• Limited competition housing is where developers bid up the land price and bid down the house price. The house price is lower than that of pure commercial housing, but it cannot be bought and sold within five years of obtaining the property certificate. Buyers also cannot resell within five years, and it is uncertain whether there will be other policy restrictions in the future.
• Joint ownership housing is also cheaper than pure commercial housing. The government holds part of the property rights, and the buyer holds part of the property rights, which can be freely bought and sold.
• Pure commercial housing is where the buyer holds 100% of the property rights and can freely buy and sell.

Of course, from another dimension, it is also divided into second-hand houses, pre-sale houses, and existing houses. The price of second-hand houses has a lot to do with the age of the house, and the price of pre-sale houses is slightly lower than that of existing houses. We don’t want a second-hand house that is more than 10 years old, because the water and electricity of the old house and the basic facilities are mostly aging, the design is not modern enough, and living in it today is broken and leaking tomorrow, which is not enough to worry about. When I was renting a house in Zhichunli, the house was built in 95. The sewer in the bathroom always returned to smell, the kitchen was dirty, and the air conditioner was prone to trip in summer. Therefore, our focus is on new houses. If it is a second-hand house, we also require the house to be relatively new, the community environment and supporting facilities are good, and there are very few that meet the conditions after looking at several sets.

Comparison of Advantages and Disadvantages of Buying a House

Red Lines for Buying a House

About the Community

About the House Type

In order to familiarize myself with the city of Beijing, I made a Beijing map puzzle and bought a Beijing map book, in which the Haidian Mountain area has almost been turned over by me.

We also learned some information about urban planning and land auctions through the official “Beijing Planning Natural Resources” public account and the announcements on the Beijing Municipal Government website. Public accounts such as “Haidian Mountain Back Network”, “Haidian Mountain Back Information”, and “Haidian Real Estate Intelligence” also provide a lot of valuable analysis on urban regional planning and real estate information.

Candidate Properties

When I was allowed to buy a house when my household registration came down, according to our preliminary research, there were not many houses that could be considered for purchase.

In 2020, there was a pretty good joint ownership house, Xishan Jinxiufu, which only cost 56,000 per square meter, and the location was excellent, adjacent to the Xibeiwang Station of Metro Line 16, almost located in the middle of the line connecting my office in Shangdi Huawei Building and the Environmental Protection Park (the two places are 13 kilometers apart), it is very convenient to go to Zhongguancun by Yongfeng Road or Metro Line 16. Unfortunately, I didn’t have a household registration at that time, so I couldn’t buy it. By the time my household registration came down, there were only the first floor and 180 square meters of large units left.

At the beginning of 2021, within the scope of our budget and considering the above-mentioned red lines, we screened and focused on several properties:

Choice of house

Since I am usually busy with work, I asked my parents to come to Beijing to help me inquire about the situation at various sales offices. My girlfriend also came over during her winter vacation to check out the situation at the sales offices with us. I took advantage of my weekends and free evenings to visit all the above properties.

Among them, my girlfriend and I quite wanted the stacked villa of Mountain Island·West Mountain. The upper stack was also quite cost-effective, but unfortunately, it required 8.8 million, which exceeded the budget (now I took a look and there is no such unit anymore, the large flat layer requires 12 million). Vanke·Emerald Cloud Map seems to have a half-basement unit on the first floor, 80 square meters on the first floor, 60 square meters in the basement, the basement has windows leading to a one-meter-wide patio, and there are internal stairs between the two floors; the average price of the basement part is very cheap, like when I was reading for my PhD, I rented a basement for mining, doing experiments, and storing various collections, this basement is very suitable, but for normal life, the basement is not very useful, no one wants to sleep in the basement.

In the end, Lanshan, Happiness, Ouhai Mingyue, and Olympic Forest ONE made it to the final round, among which Ouhai Mingyue and Olympic Forest ONE are two adjacent properties, which can basically be regarded as one. Although the layouts of several properties have their pros and cons, none of them have fatal flaws. I don’t really believe in feng shui, such as the door can’t face the bathroom, etc., it’s not within my consideration, but most of the layout designs have considered some feng shui factors. My main requirement for the layout is that it is transparent from south to north, and it is best for the living room and master bedroom to face south, so the lighting is better. The house I used to share had windows facing north, the sun did not shine directly, which helped me sleep in during the day, and I slept until noon every day; the house I rent now has windows facing west, and the sun shines directly in the afternoon, which is not very good. There are quite a few tube buildings in Beijing.

I have also visited the sales offices of these properties more than once, and I have also visited the construction sites nearby. Since the sales office and the property are not necessarily in the same place, on-site inspection is necessary, for example, the sales office of Happiness was next to the West Xiaokou subway station at that time, surrounded by high-end communities such as Shihua Longyue, if you think Happiness is also like this, then you have been deceived. The map in the sales office often deliberately marks the supporting facilities as very close to the property, for example, several properties that are 4 kilometers away from the subway station are marked as 2 kilometers away from the subway station, at this time you need to measure the actual distance with your feet or wheels. The grade of supporting facilities is also particularly important to pay attention to, to avoid the situation of “saying mountain if there is a bag, saying water if there is a pit, saying there is a hot spring if there is a pee”.

The main advantages and disadvantages of these properties are very obvious, and can be seen without having to visit in person:

In the end, we considered all factors and chose Happiness Inside. Happiness Inside meets most of the “preferable” conditions for buying a house, but it does not meet the “preferable” conditions of not being on the street, having a good school district, being within 1 km of a subway station, having a usable area of over 90 sqm, and being on a middle floor. The smallest bedroom is actually a study, which is quite tight with a bed in it; the kitchen is also small, which is a major drawback, as I hope to fit a dishwasher, and the refrigerator may have to be placed outside the kitchen. Although my building is close to the main road of Beiqing Road, there is a 40-meter green belt in between, so I hope it won’t be too noisy.

The biggest regret is not making the decision earlier. Happiness Inside was launched in November 2021, if I had made up my mind to buy here one or two weeks earlier, there wouldn’t only be 2 floors left, and I could have bought a better floor. Not long after, the small units on the 1st floor and the top floor were also sold out, showing the love of the people of the capital for this property. At the end of last year, China Resources opened a new property, Happiness Inside·Run Garden, 4 km northwest of Happiness Inside, near the North Court of the Forbidden City. The location is not as good as Happiness Inside, with a quoted price of 83,000 (Happiness Inside quoted 80,000), and there were still many buyers, which I witnessed when I was making the down payment and handling the procedures.

After Buying the House

We negotiated the price from 80,000 per square meter to 78,000 (99% discount on 99% discount) with the sales lady, and to raise funds, we extended the down payment time as much as possible, paying in three installments, from signing the contract in February 2021 to paying off the down payment in September. The building I bought was topped off in November, so I started applying for a loan, and officially started repaying the loan in February 2022. Paying the down payment in installments, compared to paying all the down payment at the time of signing the contract (I couldn’t afford that much money at that time), is equivalent to the developer bearing the interest cost of 120,000.

Under construction Happiness Inside

From signing the contract to topping off, every time I passed by Beiqing Road, I could see my building growing taller and taller behind the huge billboard. Every time I went to handle procedures or make payments, the sales office of Happiness Inside would prepare some carefully made small gifts. Once, the sales lady said that there are 620 academicians in Haidian District, accounting for 36% of the country and 77% of Beijing; any programmer in plaid shirts in these office buildings next door could be worth tens of millions. I am very grateful to the company for giving me the opportunity to save nearly half of the down payment in three years. Through the efforts of my family and myself, I am able to become a homeowner in Haidian (strictly speaking, after the house is delivered in 2023), and I feel that my efforts have not been in vain.