Intergenerational financial support for homeownership and co-residence in Chinese cities

Abstract

Drawing on questionnaire data from six cities in China, this study explores the relationship between intergenerational financial support from parents in adult children's housing purchases and key life course facts. The regression results indicate an inverted ‘U’-shaped relationship between the age of young adults and the occurrence of financial support from their parents in housing purchases. Intergenerational co-residence, popular in China, is significantly and positively associated with financial support from parents for housing purchases. This suggests that many Chinese parents seek to achieve further intergenerational reciprocity through co-residence after giving financial support to their adult children. Interestingly, the regression results on samples without loans show that intergenerational co-residence is not significantly related to occurrences of parental financial support in housing purchases. This indicates that more affluent families purchasing housing without loans may not need to engage in intergenerational reciprocity through intergenerational co-residence. This paper provides new empirical evidence of intergeneration wealth transfers on homeownership in the context of China. It enriches our understanding of the relationship between intergenerational financial support for homeownership and the phenomenon of co-residence.