The Chinese economy maybe slowing down, but one Chinese city is seeing its real estate market boom out of control.
While national housing prices have recovered somewhat, prices in Shenzhen, the southern Chinese town neighboring Hong Kong, have risen an astounding 46 percent since the beginning of last year—by far the most among all major Chinese cities, according to the Wall Street Journal. To put that into context, Shanghai’s housing prices rose 16 percent and Beijing’s 10 percent in the same period.
In 2014, the Chinese government loosened restrictions on mortgages, helping Shenzhen bloom. A growing technology industry, limited supply and less-stringent buying restrictions have also driven buyers to the city.
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Now, in terms of unaffordability, Shenzhen tops Hong Kong – one of the world’s priciest housing markets. Shenzhen’s housing prices were 20 times average disposable income in 2014, and is likely in the high 20s today, according to E-House China R&D Institute data cited by the Jounal. Meanwhile, prices in Hong Kong were 19 times average disposable income, according to research firm Demographia. [WSJ] – Christopher Cameron