Leave or Stay, Young Chinese Struggle with High Housing Prices
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After 10 years in Beijing where they attended college, fell in love, and got married, 30-year-old Xue Jinyong and his wife decided to leave the city as they are expecting their first child but cannot afford an apartment.
With a monthly income of about 11,000 yuan (US$1,617), the couple used to eye a second-hand apartment of 73 square meters, which is priced at 1.35 million yuan, on the western fringe of the city.
However, the savings of the white-collar couple and that of their parents in the countryside were not enough for the minimum down payment of about 400,000 yuan.
"After days of consulting with relatives and friends, we decided to move to Taiyuan, where the average housing price is only one fourth of Beijing's 20,000 yuan per square meter," Xue said.
Though with a lower salary in Taiyuan, capital city of the northern Shanxi Province, "I can buy a big apartment and we can finally live in our own home," he said.
While Xue chose to realize the traditional Chinese dream of owing a residence by moving out of Beijing, struggle with the high housing prices goes on for those who are determined to pursue the dream in big cities like Beijing, Shanghai and Guangzhou.
With housing prices soaring in metropolises nowadays, buying an apartment is becoming a luxury many people cannot afford.
According to Beijing Municipal Statistics Bureau, the per capita annual income in 2008 was 44,715 yuan, while apartments are selling for an average 20,000 yuan per square meter.
It means an apartment of 80 square meters costs almost 1.6 million yuan, which would require a household of two wage-earners to repay with all of their salaries for about 17 years -- excluding the interests.
Confronted with high prices and yet an urgent need to buy an apartment in a few years after graduation, many young Chinese turn to their parents for help.
In fact, most of Beijing residents aged between 20 and 30 rely on their parents to pay part or even full price of their new apartments.
Fang Zhou, from southwest China's Yunnan Province, is one of them. In June last year, her parents paid 800,000 yuan as down payment for her 60-square-meter apartment priced at 1.1 million yuan in downtown Beijing.
With a master degree in accounting, she landed her first job in a foreign company in 2007 and has worked there ever since.
"I couldn't have bought it without my parents' help," she said. "I can afford renting an apartment right now, but renting never gives me the sense of security."
Now, Fang pays the mortgage with one third of her income, leaving enough money for "living comfortably."
Housing had not been a big problem under China's old cradle-to-grave welfare system that provided free education, health care, housing as well as pensions.
In the late 1990s, the government launched a sweeping reform on housing, scrapping the government allocation of apartments to urban residents.
Since then, the real property sector has boomed. Strong demand and scarce urban land resources have driven up prices, as more people move to big cities to seek better educational and career opportunities.
In recent years, the prices have rocketed to be "abnormally" high as some experts believed.
Statistics from Goldman Sachs showed over the past six years, the housing price hikes had outpaced income rises by 30 percentage points in Shanghai and 80 percentage points in Beijing.