Property boom turns unlikely Chinese cities into realty goldmines

SOME of the world's priciest housing markets are not exactly where one might expect. A four-year property boom in China has elevated a collection of little-known cities and turned them into real estate gold. While that's been great news for speculators, it's raising concern about whether China's educated middle-class is quickly being priced out of these so-called second-tier cities, undermining Beijing's goal of making them home to the millions moving from rural areas. Another risk is increasingly stretched family budgets: The average household debt-to-income ratio in China soared to a record 92 per cent last year from just 30 per cent a decade ago. A 1,000 square foot apartment in downtown Xiamen, a port city on China's southeast coast, is almost as expensive as the average home in London, even though local wages are a quarter of what's on offer in the British capital. In Hangzhou, home to the headquarters of tech giant Alibaba, prices per square foot now rival Seattle, where Amazon.com is based. How these cities found themselves here is a confluence of urbanisation and the promise of quick capital gains. Some 90 million people have relocated from rural areas since 2012, encouraged by better job prospects and policies aimed at giving migrant workers social welfare that's more akin to urban dwellers.