property prices

Wang Yong

Last week the annual report on the state of the real estate industry by the Chinese Academy of Social Sciences warned that rocketing house prices had become the most important obstacle to that sector's healthy development.

Here in Shanghai they rose 14% in 2008 and again in 2009.
However, Wang Yong, a young estate agent in Shanghai, insists that should not deter buyers.

"I've sold seven apartments on this estate alone in the last month," he says as he shows another potential customer around a property.
"Now is the best time to buy. Our analysis of the market suggests it's very likely prices will continue to rise."

His salesman's patter is persuasive as he takes the 24-year-old professional he is showing around from room to room.

But it is soon clear the place is well beyond the means of the young man, Han Rui.

Mr Han
Mr Han is saving hard - half his net salary each month - but a two bedroom place can cost 20 or 30 times the average annual wage here at the moment.

Currently he shares a cramped company dormitory with his girlfriend and a colleague from work. The walls are bare. The couple share a narrow single bed.

Marriage plans
He says buying a property is not a choice, it is a necessity. If he loses his job they will lose their home. He wants to get married in three years time so he has to become a homeowner.

"I am a very traditional person," he says.
"I feel that when you get married you must own an apartment. If not the marriage is meaningless, because you can't offer each other security.
"In fact, my girlfriend's parents might not allow her to marry me unless I have one," he adds.
A new home for a new couple is so important that most families will do whatever they can to help to them pay for it.

Prices might have been rising for some time now but the market is much more stable here than it is in many Western countries, according to Andy Rothman, China Macro Strategist at CLSA Asia Pacific Markets.

Han Rui came to Shanghai from Hubei province in search of a better life.
He is confident a solution will be found to cool down the over-heating property market.
The government will in time start to make housing more affordable.
He does not know how long it will take but he is certain he will one day be a homeowner.