Comment

The ugly truth of urban housing boom

By Meng Jing (China Daily)
Updated: 2009-12-14 09:11

Four years ago, my friend's father bought her a tiny apartment in a remote area in Beijing. It cost nearly 10,000 yuan per sq m and we believed her family was either too rich or had made a huge mistake. Now the price of her apartment, which is only a five-minute walk from a subway station, has jumped to 25,000 yuan per sq m. Now, we see that her father had great foresight.

Some people believe that Beijing has relatively low housing prices. "Look at New York, look at London, Look at Tokyo," they argue. However, the sad thing is that people in Beijing don't earn as much as people do in New York, London or Tokyo.

Based on today's prices, it will take me at least two decades to buy my friend's tiny apartment.

But the problem is there are no signs the prices will stop increasing. The number of second-hand apartments sold in November in Beijing pretty much speaks for itself. More than 30,000 apartments with an average price of 13,000 yuan per sq m, a record high, were sold in one month, up by 47 percent from October, making November 2009 the best month in Beijing real estate history.

I believe that when people are frightened, they are capable of anything. For people who are scared of catching A/H1N1 influenza, they want to buy chili and garlic no matter how expensive they are.

For those who worry that they won't be able to buy an apartment, the best choice seems to rush into the Beijing market before the price gets more unaffordable. At this point, rational consumption is not a consideration.

I recently found an attractive apartment near the North Fifth Ring Road. Two months ago, it was 13,000 yuan per sq m and now it is 18,000 yuan. I'm more than scared, I'm desperate and it seems my parents and grandparents will need to give me a helping hand if I want to buy an apartment in Beijing.