Focus

Getting a grip on property ladder

(China Daily)
Updated: 2010-10-13 08:13

Is now the right time to buy?

Luo Jun is desperate to buy his first apartment. Not only does he want to start married life with his bride-to-be in his own home but he also fears the longer he waits, the higher the prices will rise.

Luo Jun shares an apartment in Guangzhou, Guangdong province, but wants to buy his own place before he gets married. Provided to China Daily

He has been renting a house in Guangzhou, capital of Guangdong province, for more than a year and feels the time is right to get his foot on the property ladder.

"If I don't buy now, I won't be able to afford prices in the future," he said. "Also, I get married next year and in Chinese tradition a man must own an apartment before he weds."

Luo is facing a common conundrum in this southern metropolis, one of the most popular destinations for migrant workers and college graduates and one of the country's largest property rental markets.

The 31-year-old, who graduated from Chengdu University of Technology in Sichuan province in 2001, earns a monthly salary of about 15,000 yuan ($2,200) as co-owner of an interior design company.

He shares a three-bedroom apartment with two others in the Zhujiang New Town, a booming central business district, and spends about one-fifth of his wages in rent.

"It is comfortable to live in the new commercial area but most fresh graduates can't afford such a high rents," said Luo, who was raised in Shaoguan in northern Guangdong. "They usually have to live in urban villages, like I did."

However, residents looking for space in the city's cut-price residential communities have found it more difficult after authorities demolished the Pazhou, Linhe, Yangji and Xiancun areas to make way for expansion work.

The move forced some 90,000 migrant workers and graduates to look for new homes, "which resulted in a rise of overall rental prices," said Luo.

This year, the average cost of renting a single room in Longtan village, which neighbors Pazhou, rose from 400 yuan in April to 600 yuan in August, according to a tenant.

To ease the problem, authorities vowed to build about 8,000 new houses (each no more than 60 square meters) to rent to low-income individuals by the end of 2010.

For the time being, Luo can only wait for the right house at the right price. The average property price in Guangzhou rose 7.5 percent to 12,056 yuan per square meter in August, according to sources with the city's land resource and housing management bureau.

A survey by Netease, a Guangzhou-based online service provider, also found that the prices of more than 60 percent of new properties have soared roughly 15 percent in the past five months.

"The prices in Guangzhou, compared to Beijing and Shanghai, are comparatively low, so I believe the price will rise in the near future," added Luo.