Houses for pensions

Housing has become a hot topic again, but this time it is about housing as a means to make life more comfortable for the elderly.

As one of the ways to ease the financial pressure of an aging society and support the increasing number of senior residents, a pilot houses-for-pensions plan will likely be released next year according to a State Council document released on Friday.

With the number of residents above the age of 60 reaching 194 million by the end of 2012 and likely to exceed 300 million by 2025, China must develop a long-term plan to help the nearly 20 percent of its residents who will rely on pensions to lead a comfortable and decent life in the decades to come.

Mortgaging their property may be an option for the elderly in the near future when the State pensions are not enough for them to lead a decent life. But getting people to take up the option will be easier said than done.

Shanghai introduced a house for pension system in 2007, but only a few people accepted the opportunity to sell their homes to Shanghai's housing fund and live in it as a tenant or mortgage their homes to a financial institution and receive a monthly income until their death.

And despite a property certificate homeowners get when purchasing an apartment, a homeowner has de facto rights over the property for only 70 years, which means the terms remaining on the lease and thus the returns will be even less.

Also housing prices and the operations of mortgage institutions remain an uncertainty and there is the potential risk of the realty bubble bursting.

It is laudable for the government to seek as many feasible ways as possible to make things easier for the retired, and allowing people to use their property as a means to increase their pension may be a good option for some.

But whatever the prospects of any housing-for-pension plan, it should only be a supplementary option. What the government needs to do is to make sure its policies for the elderly are devised on the basis of adequate research and improve the pension and social security system.