Engage a Chinese software engineer or even one of the country’s dustmen in conversation and it won’t take long before China’s property prices take centre stage. Property has become a national obsession, especially in densely populated Shanghai, a metropolis where high-rise towers stretch to the horizon and house prices have followed a dizzying cycle of boom and bust and back again.

Shanghai was famed in the Twenties and Thirties as the “Whore of the Orient”, where gangsters lived in city mansions, homesick British and French traders built gabled homes in concession areas and rickshaw men, jobless peasants and refugee White Russians lived cheek by jowl in crowded longtang alleys of rowhouses. Today, gleaming, white-tiled apartment blocks and neon-lit shopping malls sit in their place, with Shanghai having been transformed in only a decade by the ambitions of property developers and the aspirations of its 18 million residents.

Hu Yang spent 14 months pointing his lens into the homes of rich and poor for his book, Shanghai Living. He wanted to look behind the glitz associated with China’s economic juggernaut and show the day-to-day existence of its people, to capture them in their own environment, stripped of the mask or “face” that underpins Chinese society beyond the home. “China is a focus for the whole world and Shanghai is like the dragon’s head,” Hu says. “But what about the real lives of people behind the superficiality? We see so many pictures of the new Water Cube and the Bird’s Nest for the Olympics [in Beijing]. These may be magnificent, but they don’t represent the reality of life for ordinary Chinese. At home is where people can truly be themselves. Where they relax and are no longer constricted by the identities they may take because of their work or their position in society.”

Gaining entry to a home and winning the confidence of its occupants was a time-consuming process. Introductions came through word of mouth, and frequently he was turned away, but more often than not curiosity won out. To each of his subjects he posed three questions: “What are your current living circumstances?”, “What is your greatest desire?” and “What is your biggest anxiety?”

Whether visiting an unemployed worker living in a hostel or a company executive with a villa in the suburbs, one aspect of his subjects’ lives soon became clear: the size and comfort of a home does not always correlate to the happiness inside it. He describes meeting subjects who live with all the trappings of wealth but who seem mired in unhappiness and weighed down by possessions. And then the elderly couple living in a single room cluttered with a lifetime of possessions and smilingly content with their lot.

The vast majority of Shanghai’s residents live in apartment blocks, as Hu’s book shows. Most of the longtang have disappeared under the treads of bulldozers. The few that remain – most share kitchens in the street and are without indoor bathrooms – are relics of an almost forgotten way of community life. Everyone knew their neighbours in these close-knit communities. They also knew each other’s business and didn’t hesitate to interfere, gossip and make trouble when neighbours fell out.

The crumbling Art Deco villas invaded and occupied by dozens of families during the Cultural Revolution (1966-1976) have either disappeared or are being restored to something resembling their former glory. City authorities have returned some to their original owners. Others have been sold to the new rich and foreigners or expropriated by Communist Party mandarins for official use.

But what of the hundreds of thousands of people whose tiny alley-homes (little more than one-up, one-down rooms) were razed to make way for the glitzy skyscrapers, smart hotels, modern museums and new underground railway lines that mark central Shanghai as a futuristic metropolis? Or the many Chinese who lived in government-assigned tenements, benefiting from the cradle-to-grave social welfare introduced after the Communist Party took over in 1949?

Those who could prove some form of ownership were granted compensation – not nearly enough to cover the cost of a new flat in the suburbs, but at least enough to make a down payment. State employees – the majority – have also been persuaded to move away from the city centre with the offer of a new flat. Prices in Shanghai vary from £10,000 for a one-bedroom flat in the suburbs, to £250,000 for penthouse in the city centre to £1.4 million for an Art Deco villa, which is out of reach for most workers, with the average take-home wage £950 a year. The rapidly growing middle class, made up of people eager to own their own home, fills flats in gated communities. Hu himself lives in one of these, and his minimalist modern flat, with its wooden-floored living room, bare white walls and flat-screen television would not be out of place in his book.

At the other end of the scale are the migrant workers who arrive from the countryside with hopes of making their fortune in the big city. They live in single-room shacks because they lack the compulsory household registration papers. In Hu’s book there is a bedridden widow who depends on her children for survival because she has no papers and thus no rights to a government pension. And there is a blind couple who were compensated by the state when it razed their home, but because they cannot borrow from the bank to buy another, they are forced to live on the charity of their son.

Living in a single room papered with photographs of Chairman Mao is Zhou Zhengquan, who, year after year, was extolled as a model communist factory worker. Since his state factory followed thousands of others into bankruptcy, he has lost faith in the party and lives hand-to-mouth doing odd jobs.

Another victim of unemployment, Chen Xi, sums up the spirit of this city of extremes. His tiny room is home to himself, his wife and all their possessions, but he is determined to keep up appearances, wearing a shirt and tie, so others will not see his poverty. His life is a far cry from the trendy young things in flats furnished with simple Ikea furniture or the prosperous middle-aged who show off their riches in rooms stuffed with ornate, gilt and downright tacky fake Louis XV chairs.

Tellingly, one group makes no appearance – government and party officials. Hu explains: “They don’t want people to see if they have acquired assets and riches and they don’t want to become the focus of public attention because this could be bad for their career. They are very cautious.”

Hu Yang’s photographs are to be exhibited at China Design Now, part of China Now (www.chinanow.org.uk), the UK’s biggest celebration of Chinese culture. China Design Now is at the V&A, London, and runs from March 15 to July 13

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