Limited qualified applicants
Another obstacle to carrying out the plan is that not everyone who owns a house qualifies to apply for the pension.
CRI revealed that local policy in Shenzhen, Guangdong Province, requires that applicants should own at least two properties, since local banks want to dodge the potential risk of property values shrinking sharply in the future.
However, those who have more than one home are less likely to need the house-for-pension program to support their old age in the first place. As a result, only a small number of residents are both qualified and willing to participate.
Localization
In addition, the traditional idea prevailing among most Chinese that the elderly should depend on their children also poses a challenge.
"Elderly people are often concerned for their children, most of whom cannot afford their own homes due to high housing prices. The children would expect to inherit their parents' house after they die," according to the CRI report.
In response, the Shanghai branch of CITIC bank recently issued a debit card for middle- and old-aged people, which offers them mortgages on their properties. However, according to the bank, while the offer is similar to reverse mortgage loans in foreign countries, some improvements had been made to cater to the traditional mentalities of the Chinese.
After the loan tenure terminates, for example, the house would still belong to the original owner, who can leave the home to their children but must pay off the loans and interest, explained the bank.
Insufficient policy support
Senior citizens also worry that financial institutions may take advantage of them and devalue their property. Plus, they are concerned about whether they can rely on their property given the ups and downs of the real estate market, CRI reported.
Media reports have pointed out that the reality every Chinese now faces is that the government does not have enough money for its people in the account. So far, the void in China's national pension account has reached 1.3 trillion yuan.
The government emphasizes that Chinese people need to mainly rely on family support. However, its one-child policy has resulted in a limited number of young laborers in each family. Furthermore, the current commercial pension insurance options haven't gained trust among many Chinese people, according to CRI.
