Shou Zhenwei, a 28-year-old state-owned company employee in Beijing, paid 1.4 million yuan (205,000 U.S. dollars) for a two-bedroom apartment this month, realizing a long-cherished dream.

The price was 400,000 yuan higher than Shou's budget at the beginning of the year, but he and his fiancee, Sun Hua felt they should buy quickly before prices went up further.

THE IMPOSSIBLE DREAM

Shou's home outside Beijing's northern second ring road is less than 70 square meters, which equates in value to more than 20,000 yuan per sq m for the second-hand apartment built two decades ago.

That works out at two months of Shou and Sun's total gross income for each square meter.

"We have only worked for two years, so we don't have much saved. We want to get married next year, so we had to borrow 600,000 yuan from parents and relatives for the downpayment," Shou says.

Sun works in an export-oriented firm and sagging export demand resulted in smaller paychecks this year.

"I feel uncomfortable borrowing so much hard-earned money from parents and relatives, but we have no other alternative in the face of increasingly rising home prices," Sun says.

The 4,700-yuan monthly installment going to the bank for the next 20 years is almost half of their combined income.

"We wanted to wait for prices to stabilize, but we worried that prices would climb even higher," Sun says.

"Many of our young friends are borrowing money from parents for downpayments, working hard and cutting corners to buy homes. For those who come from rural areas and whose parents cannot give them much financial help, buying a home is an unattainable dream."

The couple's story is common as home prices have gone through the roof since they began to pick up in February.

Average prices of second-hand homes in Beijing have soared 49 percent since the beginning of the year to around 16,100 yuan per sq m at the start of this month, says Qin Rui, a senior analyst with Beijing-based 5i5j Real Estate Service.

"There are some bubbles in the home prices, as many home buyers find the prices in big cities too high," Qin says.

HOME, LAND RATES RISE

Figures from the National Bureau of Statistics show home prices in 70 metropolitan areas, including Beijing and Shanghai, rose 3.9 percent in October from a year earlier, the fifth consecutive monthly spike.

Chinese home prices and trading volume began to rebound after the Spring Festival, as many first-time buyers thought home prices had hit the bottom, says Chen Sheng, vice president of the China Index Academy, a private-sector research institute specializing in real estate.

"As the market saw a buying spree boosted by first-time home buyers, investors and those who traded up for better flats came in and have pushed prices nationwide even higher since May," Chen says.

The surge on the back of the credit-driven stimulus package and lower loan rates took many developers by surprise, he says. The backlog of commercial homes in Shanghai was enough for eight months sales at the start of the year, but had since fallen below 10 weeks.

Experts assert a market rebound and reduced backlog prompted state-owned and private developers to buy more land. Massive lending this year also helped developers to buy them at sky rocketing prices.

This practice further shored up prices of existing and second-hand homes in nearby areas, and increased potential buyers' concerns, Qin says.

After Guangzhou-based private-sector R&F Properties bought a site within the eastern third ring road of Beijing in May for 1.022 billion yuan, 242 percent above the opening bid, second-hand home prices rose 6.5 percent to 16,500 yuan per sq m in less than 10 days at nearby communities, 5i5j figures show.

Second-hand home prices in the area had surged to around 30,000 yuan per sq m as of Thursday, Qin says.

Residents or travellers passing high-end residential buildings in Beijing at night often remark on the number of apartments with no lights on.

There are no occupancy figures at city or national levels, but some Chinese believe buying property is a better and more stable investment than buying shares. Some buy several apartments and wait for their properties to appreciate in value without renting them out, Qin says.

AFFORDABLE HOMES

Young couples like Shou and Sun have few options. They are not eligible for applying for affordable housing and the affordable homes are often far from the downtown areas.

In Beijing, only families with a total annual household income below 88,000 yuan are eligible to apply for affordable housing.

"We don't qualify to buy an affordable home, and life is not easy after buying another home on installment. We have shortened our daily shopping lists and cut our budget for the wedding and honeymoon," Shou says.

The government-subsidized affordable housing program is aimed at providing accommodation for 7.47 million low-income urban households from 2009 to 2011.

However, a survey by the National People's Congress showed low-income home construction in 2009 was behind target with only 23.6 percent investment realized by the end of August.

Liu Yuanchun, vice president of the School of Economics of the Renmin University of China, would like to see the government step up efforts on low-rent apartment construction next year for urban dwellers.

"The government should endeavor to help more low-income urban families and young couples get access to affordable homes. This can help improve their living standards and is also conducive to the stable and long-term development of the property industry," Qin says.

Shou says, "I hope young couples like us can qualify to buy affordable homes, and some affordable apartments can be located within the downtown areas. You see many Beijing communters living outside the fifth ring road going to work very early and dozing off on subways or buses."

Next year Valentine's Day is also the first day of the Chinese lunar year. Shou and Sun will buy each other a modest gift, and carry bigger gifts back to parents and relatives who lent them money for their home dream.