Information Times last week picked up on a report from Savills, an leading international property management service company, with the results from its latest investigation into average residential prices in many Chinese cities as well as the varying local income levels among middle classes in different regions throughout the country.
The Savills report reveals that in Shanghai, which sits at the top of the list, the average middle class family has to save for approximately 30 years in order to purchase a 100 sqm apartment. Tied for second place are Guangzhou and Beijing, in which families must save for an average of 28 years to purchase an equivalent property.
Perhaps unsurprisingly, Savills’ statistics also show that the price-to-income ratio (PIR) in several first- and second-tier cities in mainland China is in fact higher than for cities overseas such as Stockholm, Sydney, and even Zurich.
The study also shows that at the same time that income and dwelling size for urban residents has remained roughly stable since 2001, property prices have continued to rise steadily.
PIR figures in China’s top 10 sample cities have soared during every year included in the study, due largely to rising housing prices, save for the last two years when cities such as Beijing, Shanghai and Hangzhou saw PIR figures dip slightly as the result of regulation and market controls.
With regard to the future of housing prices, Liu Deyang, president of Hong Kong-based investment management company First Pacific, remains optimistic that the market will be able to lower prices by between 10-20% over the coming year.