Home prices in some unlikely Chinese cities now rival London, after a four-year boom in residential property

London, Seattle, Manchester and, um, Xiamen.

Some of the world’s priciest housing markets aren’t where you might think. A four-year property boom in China has elevated a collection of little-known cities and turned them into real estate gold.

While that’s been great news for speculators, it’s raising concern about whether China’s educated middle-class is quickly being priced out of these so-called second-tier cities, undermining Beijing’s goal of making them home to the millions moving from rural areas. Another risk is increasingly stretched family budgets: The average household debt-to-income ratio in China soared to a record 92 per cent last year from just 30 per cent a decade ago.

“A property bubble is foaming up in many places in China,” said Chen Gong, the chief researcher at independent strategic think tank Anbound Consulting. “Prices are starting to look abnormal when compared to residents’ income.”

Vincent Fan is a case in point. The 26-year-old IT engineer says the lack of affordable housing is forcing him to consider moving from Xiamen, the city he’s called home for eight years after relocating from inland Shaanxi province to study. Home prices – which in Xiamen have more than tripled over the past decade – are now roughly 40 times his salary, he says.