China's High Home Prices Creating 'Rat Race'

China's High Home Prices Creating 'Rat Race'

Residential News » Asia Pacific Residential News Edition | By Francys Vallecillo | January 6, 2014 12:48 PM ET

As Chinese home values keeping rising, thousands of Chinese are heading underground, creating what locals call the "rat race."

Underneath an affluent downtown apartment building, local worker Hu lives in a 43-square-foot apartment for 400 yuan ($65.85) a month, with no air conditioning and a shared toilet down the hall.

"I can't afford to rent a house," Hu told MSN News, while declining to provide his given name. "If I weren't trying to save money, I wouldn't live here."

Living in basement apartments isn't illegal in China, MSN reports. And the "rat race" is growing, considered "casualties" of a housing market out of the government's control.

China's new home prices increased again in December, posting the highest gain in 2013.

Even though home prices seem to be running away from people, the government is shying away from further national property curbs for fear of a negative economic impact, analysts say.

However, local governments in Shanghai, Shenzhen and Beijing have all introduced measures to cool the property market.

"Some people can buy several homes, some people can't even buy one," Mao Yushi, co-founder of the Unirule Institute of Economics, an independent think tank in Beijing, told MSN News. "There will be an impact on society."

As home values go up, more people are heading underground. Of the estimated 7.7 million migrants living in Beijing, approximately one-fifth live either at their workplace or underground, MSN News reports, citing the state news agency Xinhua.

However, Beijing's housing authority challenges that statistic, telling Reuters a government survey only found 280,000 migrants living in basements last year.

The government has increased the supply of low-cost public housing. In Beijing, the total floor space of public housing increased 20 percent in the first 11 months of 2013, compared to the same time period in 2012, MSN reports.

However, the problem may be getting worse as more people migrate to the country's major cities in hopes of employment and education opportunities.

The city of Beijing witnessed another 316,000 migrants in 2012, with the population reaching 19.6 million.

A vivid example of the "rat race" situation was a manhole in Beijing sealed by authorities after local media discovered a group of people living in the sewers underneath.

For now, the dream of owning a home may seem far-fetched for many Chinese.

"It's too difficult to have a house right now," Hu told MSN. "Every basement has people living in it...there are so many of us out there."

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