Beijingers are reacting differently to the ever-increasing cost of securing accommodation in the city.
Despite the government's best efforts to cool inflation and tame the property market, the cost of purchasing a house in Beijing continues to rise. In the first quarter of 2011, real estate investment soared by 37% with building activity increasing an equally staggering 25%.
Buying a luxury villa in the capital will set you back around 40 million yuan ($6m which would be enough to buy a London mansion or Manhattan apartment. Shanghai can be even more expensive, with one luxury apartment selling for 60 million yuan ($9.4m).
The price of housing is on average 10 times more than the average annual household income, compared to about 3 times as much in developed economies. So how are the 20 million official residents of Beijing coping in this climate?
Some better than others. Opposite the olympic park there is a luxury apartment complex catering to the capital's new class of super-rich, which comes complete with private spas, traditional building materials and courtyard houses on the roof. A night in one of these pint-sized palaces will set you back up to a princely 1 million yuan ($146,000) a night. Buying outright could set you back as much as 300,000 yuan per square metre if money is really no object and status is everything.
The capsule apartment Image: CNS Photo |
Meanwhile, at the other end of the spectrum lies the Shijingshan district in Beijing, where 78 year-old retired engineer Huang Rixin has opened up a series of capsule apartments based on the Japanese capsule hotel concept.
Each room is 2.4m long by 1.2m wide and can be rented for 250-350 yuan ($36-$51) per month. Huang claims he built the rooms to help university graduates, although he has had some interest from migrant workers looking for temporary accommodation.
Whilst the government has pledged to spend billions of dollars to build more affordable housing around Beijing, some experts claim their actions could be counter-productive and may create market distortions and other inflationary pressures. For now, Beijing has vowed to do everything it can to keep housing prices, inflation and the consumer price index down, but try telling that to the city's mega-rich.