“I don’t spend much,” said Chen, who was born in Maanshan, a city of steel mills in Anhui province. He moved to Shenzhen in August 2013 and immediately fell in love with the booming border city facing Hong Kong because it felt “immigrant friendly and transparent, providing equal opportunities with no dialect barrier.”

Chen spends less than 30 yuan a day on food and commuting. He lives with his wife, close to work, in a 40-sqm flat that they rent for 1,050 yuan a month in Longhua district, one of the city’s manufacturing hubs. The flat he bought is too far from where he lives without driving, so he rents it out. His next goal is to either buy a car or sell the flat.

“If you can cut your teeth buying a home in Shenzhen, just buy it or rent it out if you don’t live there,” Chen said. “In a few years, when home prices rise, you can sell it and use the money as a down payment on a place you prefer.”

Shenzhen is one of China least affordable cities, with the price of new homes averaging 53,700 yuan per square metre last year – the highest among first-tier cities including Beijing, Shanghai and Guangzhou. According to a report by UK-based consultancy Longview Economics, an average 90-square-metre flat in Shenzhen sells for close to 70 times the city’s median income.

China’s housing boom started with privatisation in 1998, which ended the distribution of state-owned housing and paved the way for a privately owned residential market that has thrived ever since. Some households in the generation of Chen’s parents became wealthy by buying public housing at a below market prices before selling them at a substantial profit before investing in commercial property. Others, usually migrant workers, were excluded from this early accumulation of wealth.

“Today, high home prices act as a filter,” Chen said. “Either you get screened or your family does. It’s brutal but inevitable.”

After 2003, when privatisation was nearly complete, property prices in eastern and coastal cities started to grow in step with rapid urbanisation. At the same time, a slower increase in land supply in these cities pushed up home prices fast.

In 2010, Beijing issued policies to curb property prices across the country, mainly through restricting second-home purchases, raising minimum down payments, and tightening mortgage loans. When this started affecting economic growth, the government loosened the restrictions, letting property prices rise again. This policy shift simply makes China’s property market predictable to the extent that developers and investors have over the years formed a consensus that home prices, particularly in first-tier cities, won’t fall, according to David Ng, head of Hong Kong and China Research at Macquarie Securities.

“We have seen, over the past 10 to 15 years, that there are cycles every three years. Make no mistake about it – these cycles are basically driven by policy. The policy comes around because the demand is so strong. And each time these policies basically suppress and delay the demand,” Ng said.

The latest nationwide loosening came in March 2015, when Beijing lowered down payment requirements for buying second homes.Within a year, Shenzhen’s home price soared by about 50 per cent, with many sellers defaulting on sales as they expected prices to rise even higher.

Alarmed by escalating housing bubbles, last October, Beijing launched a round of administrative measures in about 20 first- and second-tier cities to cool the housing market. But these measures weren’t so effective, and the buying momentum simply spilled over to adjacent satellite cities and pushed up property prices there.

Over the past few months, tightening expanded to more than 50 top-tier and lower tier cities, and polices have became more strict. On top of restricting house purchases and mortgage loans, local governments have limited resales of properties. In cities such as Wuhan in Hubei province and Wuxi in Jiangsu province, developers were ordered not to raise prices on their new projects for sale.

The state hand was extended to curb home prices came after President Xi Jinping’s edict that “houses are for living in, not for speculation”and called for establishing long-term solutions to stabilise the real estate sector earlier this year.

Zhu Haibin, Chief China economist at J.P. Morgan, said it was “tricky” for the government to adopt city-based policies to contain property inflation in big cities and speed up clearing inventories in small cities that have small influx of population.

“Long-term measures, such as land supply polices and a property tax that are perceived to have a meaningful impact on the housing market, have not been strictly implemented in practice,” Zhu said.

Local governments still have little incentive to provide more land as land sales remain a major source of their revenues. Despite Xi’s calls, the Beijing municipal government has cut this year’s residential land supply by half from 2016. Property taxes are unlikely to be introduced soon since it was made clear during the Two Sessions in March that it would not be proposed this year. It remains uncertain whether the government can effectively tame home prices by obsessively driving down demand.

“It seems that the housing market is at a stalemate stage, with the market and the government testing each other,” Zhu said.

To be sure, China doesn’t want falling home prices to drag down growth, which was set at 6.5 per cent for this year, since real estate investment is related to many downstream industries such as construction, steel and concrete. The real estate sector still constitutes 13 per cent of China’s GDP.

But demand for properties won’t wither either. Housing is the most lucrative investment within China compared to stocks and bonds, particularly since the government began tightly controlling the yuan to be remitted for investing in overseas properties. Last year, more than 40 per cent of new loans – 12.65 trillion yuan – that the People’s Bank of China provided went to home mortgages. And housing accounts for close to 70 per cent of Chinese household assets, according to a study from the Survey and Research Centre for China Household Finance, an academic NGO, in 2016.

“Chinese citizens’ incomes depend on the net asset value they hold in the housing market. In the long run, it’s not a sustainable situation,” Li Wei, professor of economics from Cheung Kong Graduate School of Business, said.

Not every young newcomer plans to stay in Shenzhen. Before moving to the city two years ago, Huang Yuqing, 26, made up her mind not to stay longer, even though gaining permanent residency in Shenzhen was easier than Beijing and Shanghai.

As an accountant for a start-up that produces underwater robots, Huang earns 7,500 yuan a month, of which she saves 3,000 yuan for down payment on a future apartment in Wuhan, which is close to her home town. As of April, prices for new flats in Wuhan averaged 11,910 yuan per square metre, according to real estate information portal Anjuke.com.

“Shenzhen’s home prices are too high. Who knows how many years it will take for working class people like us to buy a home here,” she said. “The people I know who have bought flats came to Shenzhen in the early 2000s.”

Huang dismissed the necessity of buying a home before getting married, and added that arranging a down payment for a flat in Shenzhen would place a huge burden on the families of her and her boyfriend.

“I want a better quality of life,” Huang said. “I won’t sacrifice my life for a flat.”