Beijing least affordable city in the world to rent: Report
Updated: 2016-04-26 15:00
By Dai Tian(chinadaily.com.cn)
Photo taken on Mar 29, 2016 shows residential building in Beijing. [Photo/VCG]
Beijing has the world's least affordable rental housing market, according to a survey of 15 global cities, with costs soaring to more than 1.2 times average wages.
In part due to high rents, the city also has the second-longest commute, an average of 104 minutes per round trip, ranking only after Mexico City, according to the report by UK-based not-for-profit organization Global Cities Business Alliance.
Shanghai takes a third place among the world's 15 major cities, with daily commute of 101 minutes on average, according to the study.
The rent spikes come as China's property sector has staged a revival over the last couple of months. Beijing saw home price rise 18 percent in the year to March, and restrictions on non-residents buying housing until they have paid tax in the city for five years makes renting the only option for many.
Out of the 15 cities in the study, San Francisco has the most expensive monthly rent of $2,824, while Beijing, $789 per month, is the least affordable given local salary level, according to the report.
"Beijing's average housing cost accounts for more than 100 percent of net earnings, suggesting that a worker on an average salary cannot live alone in typical city accommodation," said the report.
For bus drivers, nurses and primary school teachers in the city, the average cost of housing exceeded their annual disposable income level in 2015, the findings showed.
Abu Dhabi only comes as a distant second in terms of affordability, with rental costs equal to 69.5 percent of local net earnings, followed by Hong Kong as a third.
Beijing could have seen spending boosted by $3.4 billion and have added some 422,000 new jobs if housing only rose 10 percent over the past five years, according to the report.
"Rising housing costs place upward pressures on wages as businesses attempt to retain top talent in expensive cities," said the report.