By Dawn Wang
Image credit: @xiaming.
A residential district next to an elite primary school in Beijing was given the name “the centre of the universe” by Chinese netizens because of its unbelievable real estate prices. According to National Business Daily a 22 year old, 37 square metre residence in “the centre of the universe” sold for 3.5 million yuan (or approximately 95,000 yuan per square metre).
Chinese housing prices have been skyrocketing over the past decade, especially in first tier cities like Beijing and Shanghai. This year, China’s State Council pledged to stabilize housing prices with new policies.
Following the central government’s pledge, municipal governments in Beijing and Shanghai announced new housing restrictions and penalties in an attempt to cool down the runaway housing markets. Unmarried individuals are now allowed to purchase only one residence in Beijing, and a 20 percent capital gains tax will be imposed on owners selling real estate in both Shanghai and Beijing.
However, the new policies have had little effect on real estate prices in areas such as the “centre of the universe”. According to Wangyi, the average price of the houses zoned near top schools in Beijing has increased by over 10,000 yuan per square meter in the past six months, and is expected to continue to rise in the future.
Studies have shown that Chinese parents always value education as “a stepping stone to success”, and are willing to purchase expensive real estate if it brings with it access to good schools. Researchers from Peking University also suggest that in a city like Beijing where top primary education is scarce, an increase in the price of houses zoned near top schools is to be expected.
There was consternation when it was revealed in March that a Chinese mother had purchased a $6.5 million (40 million yuan) apartment in New York for her two year old daughter.