Like any ordinary young couple living at Shanghai, my husband and I are now considering buying an apartment, after renting for more than a year. Everyone who has had this experience has told me how painful it is shopping around. It is especially painful for us, since the housing prices in this booming city have rocketed over the past two years.

Take a look at the Pudong New District, on average the prices there have doubled or even tripled in just a few years. About 3 years ago, people would have found a price of 3,000 yuan(US$361) per square metre crazily high for such a remote place. But now, with Pudong fully integrated into the city, it is impossible to find anything for less than 6,000 yuan (US$723) per square metre. How I wish we could have invested part of our master's education fund into a house a couple of years ago! When rent is included, we could have saved at least 50,000 yuan (US$6,000). The opportunity cost of not having made his investment is incredible.

But how many people would have thought so far ahead at that time? I still remember two years ago, I wrote a story about how residents in Shanghai are better off due to the city's relatively low housing prices. It's really amazing that how fast prices have increased over such a short period of time. The real estate sector now accounts for 7 per cent of this city's GDP, compared with just 1 per cent a few years ago.

Meanwhile, with housing prices continuously soaring, the income level of Shanghai residents has not seen any comparable leap. The latest official statistics show incomes rising by only 16.1 per cent. Apparently, a huge gap exists. No matter how lavishly real estate developers spend on advertising, they cannot expect buyers to ever catch up with such crazily expensive houses. On the other hand, rent have remained almost at the same level. This seems weird. If the real estate sector is on a healthy track, since a lot more people would choose to rent rather than buy their own houses.

When we visit condos in the evening, we can see at least one third of these apartment buildings are dark and empty. This signals that most have been purchased by speculators, who are just waiting for another jump in price. Both speculators and real estate developers benefit greatly when the economy is in good shape and the interest rate is low. Otherwise, it would be a different story.

On one hand, I hate the fact these speculators are pushing up prices so far. On the other hand, I have empathy with them because in China, there really are not much channels for investment, given the chaotic stock market and low interest rates.

The overheated property sector has attracted a lot of debate and government attention. There are some signs of price increases slowing recently. However, as an increasingly important pillar of the economy, the real estate sector is not going to crash. The only thing I can do is work harder and make more money if I am ever to buy my own house in this expensive city.

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