Although people's incomes are growing in China, the financial costs to buy a house are also increasing.
The Housing Price to Income Ratio data produced by E-House China indicates that pressures are greatest for people buying houses in bigger cities, with Shenzhen ranking hardest of all mainland cities.
By the end of 2014, on average, it will cost a family 21.7 years' income (without additional spending) to buy a 100 square meter house in Shenzhen, whilst by comparison would cost 5.7 years' income in Changsha, capital of Hunan Province.E-House China considers that the Housing Price to Income Ratio of domestic cities should be maintained at a reasonable range of 6-7 years, while 26 out of 35 cities are above 7.
The Housing Price to Income Ratio is the ratio of housing price (assumed to be a 100 square metre residential house) and household annual income, and is used as a measure of whether housing prices are at a reasonable level that household income can support. E-House China's data only covers new residential housing, and excludes the second-hand housing market.