Society

Beijing residents struggle to get on housing ladder

By Jin Zhu (China Daily)
Updated: 2010-07-19 07:18

BEIJING - Even by tightening the purse strings and cutting out spending other than on necessities, the average Beijing resident would still need at least 25 years to buy an apartment, the latest report shows.

The ratio between house prices in Bejing and the average annual income of its residents stood at 25:1 last year, according to an annual report on the state of Beijing jointly released on Saturday by Beijing University of Technology and the Social Science Academic Press (China).

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The average annual income per household in Beijing was 64,285 yuan ($9,489) in 2008, official figures show. The figure for 2009 has yet to be released.

In contrast, an apartment measuring 90 square meters, with an average price of 17,810 yuan per sq m, cost 1.6 million yuan in 2009, or about 25 times the average household income, according to the report,

As a result of rocketing house prices in many cities, it takes the average Chinese much longer to buy a house than elsewhere in the world. In Germany, for example, an apartment in Berlin priced at 1,000 euros ($1,294) per sq m usually costs a total of 82,500 euros, which is, approximately, three years' salary for the average Berliner, according to statistics from Gordon Rock, a leading estate agency in Russia which specializes in overseas property.

In most cities in the United States, the average asking price of a house is $200,000, which represents five years' salary, the statistics show.

In contrast, 60 percent of Beijing residents are currently supported by the housing system, which includes low-rent housing, affordable housing and fixed-price housing, the report said.

However, the building of low-income housing has failed to keep pace with demand. From a total of 2.29 million sq m of completed floor space in Beijing, only 14 percent was allocated for low-income housing in 2009, according to the report.

The situation is similar in a number of cities across China. In response, in May the central government pledged to ensure the stock of low-income housing by delegating the responsibility to top provincial leaders.

China plans to build 5.8 million affordable apartments this year for those on low incomes, as well as those who currently live in shanty towns, according to a document signed by the Ministry of Housing and Urban-Rural Development.

To ensure that construction is completed on schedule, the central government has allocated a support fund of 60 billion yuan, Jiang Weixin, minister of housing and urban-rural development, said on Saturday at the China Mayors Forum in Harbin.

The ministry will inspect the progress being made on the construction of low-cost housing nationwide, starting on Aug 10, he said

There will also be more extensive measures to crack down on developers who hoard land to maximize profits, Jiang said, adding that a long-term mechanism is needed to manage the market.