That Shanghai house prices are off the charts, especially in relation to average incomes, has been widely reported (and although the Economist argues that there isn’t a bubble in the property market — at least not yet — if I had money to invest, I probably wouldn’t put it in real estate in Shanghai). Still, if you look at the numbers the Economist cites, it’s easy to see why the idea of needing to buy a house strikes fear into the hearts of marriage-age young Chinese men:
Average Chinese home prices are nine times average annual household income. In the rich world a ratio of more than four would sound alarm bells; in other Asian countries prices are typically 5-7 times income. The volume of property sales has surged by 85% over the past year and prices of new apartments in Shanghai have risen by nearly 30%.
The latest talk on the town (well, in the blogosphere and in my classroom) is that a popular Chinese soap opera called “Dwelling Narrowness” was “rescheduled”, apparently because one of the main characters leaves her boyfriend and (controversially) begins an affair with a government official in order to help her sister pay off the mortgage on her Shanghai apartment (and, they added, in order to afford Haagen-dazs ice cream). My students used this as an example to illustrate how expensive it is to get an apartment in a big city in China, and how sensitive the issue has become.