A combination of factors, including the decline in fertility rate, which is partially attributed to the adoption of a one-child policy several decades earlier, and a lower mortality rate linked to a rise in life expectancy, have given way to a rapidly aging population in China.
I recently participated in the Retirement Living World Conference held in Beijing from 25-26th May and met many investors and senior housing operators from Australia, New Zealand, Japan and USA, as well as major players in the domestic market. Many of the participants shared their China senior housing related successes and struggles with the audience.
With more than three decades of development, the senior housing industry is more mature abroad than in China, and business models vary by country based on cultural background and medical expertise. In China, some existing projects have adopted models similar to residential projects by selling housing to seniors, while some are operating under a leasing model, which tend to be smaller-scale and less profit generating given the current policy environment.
From my perspective, the senior housing industry, in its infant stage, is in urgent need of regulation legislation. Similar to the social housing system, it will likely be very difficult for the government to satisfy huge potential demand in the coming decades. The timely establishment of relative regulation and incentive policies will encourage sector experienced operators and investors from aboard to become more involved in the industry. It is expected that the legislation procedure will be complicated and we can look to Australia and New Zealand as examples, where it took more than ten years to implement sufficient, effective policies.
About the author
Meggie Qin is the Head of Research for Jones Lang LaSalle in Beijing.