rfmcdonald | [URBAN NOTE] On the real estate crunch in Shenzhen, China (Reply)

Quartz' Echo Huang Yinyin writes about the extreme real estate crunch in Shenzhen, a booming city in southern China on the Hong Kong border.

Shenzhen is more than just the manufacturing hub for hardware products in China—it’s also the country’s hottest real estate market (link in Chinese). And housing prices are getting so high that the city is exhibiting the ultimate symptom of a bubble property market—outrageously expensive “micro-apartments” that aren’t even up to code.

This week, social media users in China were in uproar over Shenzhen property ranging in size from 5.7 to 7.5 square meters (62 to 80 square feet) that they called “pigeon cage” apartments. According to financial magazine Caijing (link in Chinese), brokers listed each apartment’s starting price at 880,000 yuan ($131,957), around 20 times the city’s individual annual income of 40,948 yuan ($6,136) (pdf, p. 387, link in Chinese).

One 6-sq-m (64.5-sq-ft) apartment was fitted with a desk, a 1.5-m-long (4.5-ft) bed that folds into the wall, and dozens of cabinets and sideboards, according to photos circulating on Chinese social media.

Much as tech companies like Google and Uber are causing housing prices to shoot up in Silicon Valley, the presence of Chinese tech giants like Huawei and Tencent in Shenzhen has caused young professionals to flock to the city. It now has China’s highest property prices (link in Chinese).