"It's outrageously expensive," said Li, who works for a government institute in Beijing.

A father carries his young son as he looks for their ideal home. Wu Changqing

He said the current price of a three-bedroom apartment of around 160 square meters is as much as 3.2 million yuan ($410,000) within the Third Ring Road.

"You fork out about 20,000 yuan ($2,560) on 1 square meter and all you get in return is a tiny little space not even big enough for a single bed it's absolutely insane."

Li graduated from the School of Economics at Peking University in 2001 with a master's degree. Li and his wife, both originally from Shanxi Province in North China, have been looking for a suitable property ever since, but with no success.

Li said owning a home can protect capital from being devalued as well as providing a solid investment. He shuns property developers' notions of what makes a good home.

A desirable home for him need not be big or extravagant. Rather, "it is a place where your friends are and the surroundings are green, with a brook flowing through."

"Somewhere that gives you a sense of belonging and a good quality of life," he said. "Location or access to transport is the last thing I'd take into consideration."

But Li's dream home is virtually out of reach after shopping around he has found that an apartment which barely meets his needs will cost him 2 million yuan ($256,000).

"I guess I'd either have to compromise the quality of my life if I want to stay in Beijing, or move somewhere else," he said.

Sociologist Liu Ming believes that residents in Beijing, like those in many other populous metropolises, could see a gradual erosion in the quality of life if there is not the accommodation to meet the needs of the city's young professionals.

Li Hujun, a science reporter for Beijing's Southern Weekly newspaper, has also encountered difficulties finding an apartment.

"I've being working in this city for 10 years," he said. "And still I don't have a place of my own."

In part, Li blamed himself for this situation he could have bought an apartment downtown in 1998, but changed his mind at the last minute. "It was just an apartment, not a house, and it was priced at 1 million yuan ($128,000). I thought the price might fall."

He said today's housing market is out of control prices just keep climbing. "The more the price goes up, the more I'm hesitant to buy," he says. The apartment Li knocked back nine years ago is now valued at 1.5 million yuan ($192,000).

Li rents a two-bedroom apartment with another lodger, paying a monthly rental of 3,000 yuan ($385).

"When I'm not busy, the anxiety of not owning a home starts eating away at me. Then I feel like I want to escape from Beijing," Li said.

For Li, housing is not something he associates with capital, rather it is about a sense of belonging. "A rented apartment is nothing but a reminder of your identity as a traveler in the city," he said, adding that he is unsure whether he can afford to settle down in Beijing before he turns 40 in seven years' time.

According to a Beijing-based business magazine, the average price of housing in Beijing was 8,000 yuan ($1,025) per square meter in 2006. The cost of a medium-sized (90-square-meter) apartment was 745,200 yuan ($95,500), including tax and other fees.

A typical 20-year mortgage would cost a new homeowner around 4,000 yuan ($513) a month at the current interest rate, accounting for almost 86 percent of the income of an average family of 2.8 people.

Many young people are renting apartments and some have to find flatmates to share the bills.

Wang Peng, a French editor with the Foreign Languages Teaching & Research Press, shares monthly rental of 2,000 yuan ($286) with his flatmate.

"The 1,000 yuan is only 25 percent of my monthly income," said Wang. "This way I have extra money for dating and other things."

But Wang, 26, from East China's Shandong Province, says he doesn't feel at home in his apartment. "I spend 1,000 yuan a month on this place, and it's no more than a hostel where I sleep and shower."

Wang is pessimistic about the property market. He doubts housing prices will drop within his range of 4,000 to 6,000 yuan ($513 to 769) per square meter in the near future.

"I'll give up on Beijing and go back to my home province if the house prices here keep rising like crazy."

Wang said that since he graduated from the China Foreign Affairs University last year with a master's in international relations, only one of his 108 classmates has bought an apartment and that was using his parents' life savings.

Some homebuyers, particularly young people, have to rely on their parents' financial help to cover the 30 to 35 percent deposit on a home. For some, using their parents' life savings to buy a home is similar to overdrawing a bank account. But Jin Yin, a 36-year-old music producer with China Central Television, said this tactic is risky.

"What if something happens to your parents?" she said. "They don't have money, and you don't have money either as your mortgage debt piles up the quality of life for both you and your parents deteriorates."

China's population boom and rapid urbanization, coupled with speculation, people buying up properties and forcing up housing prices, are major factors behind the lack of access to adequate housing, according to Liu Ming, a government institute sociologist.

The central government has pledged to stabilize housing prices by issuing an order to build more affordable small- and medium-sized houses, as well as strengthening land appreciation tax collection on developers, in a bid to ease urban housing woes.

According to official data, Beijing will build an extra 10 million square meters of low-cost affordable housing over the next three years.

Although the overall housing market has cooled, housing prices in some major cities are still rising. Prices in 70 large and medium cities rose by 6 percent last month over the same period last year, according to the State Development and Reform Commission. This compares to a rise of nearly 10 percent in Beijing.

(For more biz stories, please visit Industry Updates)