Rapidly rising home prices
Since the housing reform of 1998, which ended the free distribution of housing by employers and established a housing finance system across China, the real estate sector experienced a long-lasting era of prosperity. As the economic hub of China, Shanghai's housing prices have grown exponentially.In the first two decades of the 21st century, the average price of residential housing increased tenfold, reaching 36,103 yuan per square meter in 2021, while the average cost of homes within the inner ring road area remained above 119,000 yuan per square meter in 2022. Thanks to its diverse industries and robust economy, the city of Shanghai is in a sound financial position and has a low reliance on the sale of land usage rights. The municipal government had introduced numerous measures over the years, including restricting the purchase of properties by newcomers thereby limiting the number of properties that each individual could own, and increasing the down payment ratio. However, these measures had limited impacts on curbing the city's property prices.
