Years of a sustained bull run in the property market in the southern Chinese tech hub of Shenzhen means flats or apartments in the city of 18 million are now more expensive than those in Hong Kong, which has long been known as one of the world’s least affordable home markets.

Shenzhen’s ratio of average annual household income versus average home price has risen to 30, meaning a couple has to live off other income and save up their combined salaries for nearly 30 years before they can clamber aboard the city’s property ladder, according to the August data crunched by the Security Times, which is based in the city.

Hong Kong’s corresponding figure is 20.9, leading a pack of 91 cities worldwide with a population of at least one million for the ninth year running, according to the latest survey by Demographia, a US data research firm and public policy consultancy.

Xiamen, a scenic resort city and an aviation and maritime hub in southeastern Fujian province, and Beijing are in second and third spots, with ratios of 27.15 and 22, all higher than Hong Kong’s.

The Shenzhen newspaper believes that the city may have already replaced Hong Kong as the world’s least affordable home market, given that the city’s per capita income is still lower than its neighbor. Shenzhen’s net home price stood at 64,387 yuan (US$9,112) per square meter in 2018.

Homes in Shenzhen are expected to become even more expensive amid renewed speculation about developers hoarding their plots, especially after Beijing unveiled an aggressive masterplan last month for the city to edge past Hong Kong and become a “world city” as competitive as Tokyo and San Francisco to lead the charge in regional integration to form a Greater Bay Area.

Unit prices of the luxurious condos in an upmarket development by the state-owned China Resources near Shenzhen Bay typically fetch up to 120,000 yuan per square meter.

Big-ticket home transactions in the city, to the tune of several hundreds of millions of yuan, usually make headlines nationwide, including a recent 500 million yuan-deal for a cavernous duplex cum penthouse atop a 300-meter skyscraper overlooking Shenzhen Bay and part of northern Hong Kong.

Shenzhen, a brainchild of Deng Xiaoping’s reform and opening-up drive in the late 1970s, eased Hong Kong out of the top five elite league by gross domestic product among all Asian cities in 2018. But the boomtown, which booked a GDP of 2.4 trillion yuan, is also faced with acute land shortages given its landmass of about 1,990 square kilometers, where mountains and protected areas already take up a lion’s share of the total.

Yet it does not mean Shenzhen’s grassroots families are in the same plight as the underprivileged in Hong Kong, who have to scrape a living in the city’s notorious subdivided units or even “cage homes” – public housing applicants in Hong Kong have to wait almost six years before they can be allocated a “shoe box” unit.

Longhai Estate, a major public rental project in Shenzhen, has 12,363 units.
Another subsidized housing development in Shenzhen.

That is because Shenzhen’s government has been on a spree, building decent rental homes for the poor as well as for new graduates and job starters to make sure the city’s exorbitant realty price in the private market will not undermine its pull and competitiveness.

One signature project is Longhai Estate close to the city’s new CBD, a 700,000-square-meter development comprised of 12,363 rental flats – all with a balcony – in 26 high-rise blocks atop a subway station, where the average rent is capped at 20 yuan per square meter, according to the Shenzhen Daily. The city has several larger estates under construction.

A high-rise residential estate built by ZTE for its employees in Shenzhen. Photos: Asia Times

Major enterprises in the city including tech powerhouses Huawei and ZTE also offer dormitories and fully-furnished condos to their employees, either for free or with rental subsidies.

Compared with other mainland cities, Shenzhen relies less on land auctions and tax from home transactions to fill the government coffers, thanks to its burgeoning tech industry and trade. The city sold only 44.9 billion worth of land in 2018, compared with its total fiscal revenue of 910.2 billion yuan, according to official statistics.

Read more: Is Beijing planning a HK-Shenzhen merger by 2047?

Mega-bridge empty as HK stays aloof from Xi’s plan