Beijing has the world’s least affordable rental housing, according to a survey of 15 global cities, with average prices more than 1.2 times average salaries.
The report by the Global Cities Business Alliance, a UK-based not-for-profit organisation, raises fears over inclusive growth in a city that — according to one Chinese survey — this year surpassed New York to become the world’s billionaire capital.
Soaring house prices, which rose 18 per cent in the year to March, and restrictions on non-residents buying houses until they have paid tax in Beijing for five years, make renting the only option for many of the city’s young adults and migrant workers.
“From an urban planning perspective, Beijing could be the most inefficient city in China,” said Liang Hong, chief economist of China International Capital Corporation. “The problem is on the land supply side. Central government organisations, such as the military and state-owned enterprises, take up a large portion of land in prime locations.”
Beijing rent is nearly twice as expensive as its closest challenger, Abu Dhabi, according to the survey.
High rents and urban inequality lead to longer commutes for service-sector workers who deliver location-specific services. The study found that hospital nurses, primary schoolteachers and bus drivers all faced rents of between 1.1 and 1.5 times their incomes.
Beijing scored the second-longest commute, at an average of 104 minutes per round-trip, behind Mexico City at 113 minutes.
“The wealthiest workers will always be able to afford to live in the biggest cities, but the danger is that talented workers starting their careers in many sectors will find themselves priced out,” said Lesley Saville, GCBA chief executive.
Rural-urban migration has put pressure on the rental market, especially as Beijing's neighbouring northern provinces lose their traditional industries of coal and steel. The city’s metropolitan area has doubled in population in the past 20 years.
Statistics released on Wednesday from the 2015 population survey showed that migration within China had increased 12 per cent from the 2010 national census.
High rental prices damage the economy by locking up consumer spending power, the report argues, finding that a further 10 per cent rise in rental prices would suck up about $3.5bn of consumption.
As China's growth slows, economic inequality has become a hot topic for the government, wary of the social effects of lay-offs in overcapacity sectors.
A study by Beijing University this year found that China was one of the world's most unequal countries, with the top 1 per cent owning a third of all wealth.
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