In search of cheaper pastures
In light of the surge in home prices in Shanghai, an increasing number of permanent residents are moving away from the central areas of the city to the outer districts, revealed the latest survey by the Shanghai Academy of Social Sciences (SASS).
According to the latest data from the National Bureau of Statistics, the average price of a new home in Shanghai rose 27.7 percent in May from a year ago, and trade prices of used homes also grew 29.2 percent year-on-year.
The survey, which polled 2,031 respondents from six districts in Shanghai, stated that about 14.7 percent of the city’s residents live within the Inner Ring, down 5.6 percentage points from 2015, while 33.8 percent of the respondents live between the Inner Ring and the Middle Ring, a growth of 14.5 percent year-on-year. Furthermore, there has been a 5.3 percent increase in the population beyond the Outer Ring as compared to last year.
The survey also showed that nearly 80 percent of the city’s permanent population — those who hold a hukou (household registration record) — own at least one home, while 62.2 percent of long term residents said they are pressured by the city’s soaring home prices. Those with an annual income of less than 100,000 yuan ($15,032) per year are more likely to live outside the Suburb Ring, in comparison to those earning more than 200,000 yuan per year who generally live between the Middle Ring and the Outer Ring.
Shiela Wang, a Fujian native who has been working in an IT company after graduation, is one such person. She bought her first home in Baoshan district six years ago.
“It’s very difficult for me to buy another apartment for my parents. I am unable to do so without affecting my quality of life. I still have many years left on my mortgage loans for my current home,” said Wang.
Liu Tianyang, general manager of Centaline Shanghai and the vice-president of the company’s Chinese mainland operations, said that the soaring home prices have been due to the influx of top talents into Shanghai since 2013, which in turn creates high demand for homes.
For Candy Zhou, a Shanghaiborn entrepreneur, living farther from the city center means having better living conditions. Last year, Zhou bought her first house in Pudong New Area, which is within the Inner Ring, as she expects home prices in Shanghai to rise at a similar pace as those in New York and London.
“Most of the young people I know cannot afford a house in the city center. Young people don’t like the old and cramped apartments within the Middle Ring that cost millions of yuan. In order to live in newly-built houses, they simply have to move beyond the Outer Ring,” said the 26-year-old.
Bai Yimeng in Shanghai contributed to this story.