On November 5, a man from Zhejiang made headlines after winning an auction for a residence in Hegang, Heilongjiang, with a bid of merely 11 yuan (approximately $1.50). The property in question measures around 68 square meters and has an estimated market value of approximately 40,000 yuan, with the remaining amount covered by the auction platform. This remarkable event is part of a promotional campaign by Alibaba’s asset trading platform, tailored around the popular shopping festival known as “Double Eleven.”
According to Liu, a manager at the auction company Shenyang Hengyu Tongda Auction Co., participants in the auction were also responsible for handling additional fees such as a contract tax of about 2,000 yuan, which is required for the transfer of ownership.
The auction rules were designed to allow bidding to start at just 1 yuan, with increments set at 0.01 yuan. The first bidder to successfully place a bid of 11 yuan would win the house. It’s important to note that this 11 yuan cap was a stipulation of the event, and not reflective of the property’s actual market value.
A subsequent auction event, also featuring the 11 yuan cap, was originally scheduled for November 10, with another property of similar size at 67.52 square meters. However, by the evening of November 7, the platform announced that the event was halted due to a “request from the delegating party.” Impressively, this second auction had already garnered interest from over 22,559 participants.
Reports from Jimu News suggest that participants who paid a 1 yuan deposit would have their funds refunded within one to five working days following the auction’s conclusion.
Hegang has drawn attention in the past for its incredibly low housing prices, which have attracted young homebuyers from other areas, including individuals working in media and remote jobs. A field study conducted on October 25 by First Financial revealed that Hegang still offers second-hand homes that range from 60 to 70 square meters, typically priced between 40,000 to 50,000 yuan. These properties are primarily situated in communities designated for residents affected by coal mining subsidence. However, the study also indicated that second-hand homes priced between 100,000 to 200,000 yuan are more commonly found in this market.
Local officials overseeing urban redevelopment stated that the declining profitability of coal mines and the depletion of coal resources have led to a contraction in surrounding industrial districts, resulting in numerous abandoned factories and vacant buildings.
A research study cited by the publication suggested that the decline of the coal industry has given rise to higher unemployment rates in related sectors and a drop in residents’ income. Additionally, the outward migration of labor and an aging population have contributed to a weakened demand for housing in some industrial areas.
In the northeastern region where Hegang is located, investments in real estate development and sales of new residential properties continued to decline throughout the year. Data released by the National Bureau of Statistics of the People’s Republic of China on October 19 showed a 29.2% decrease in real estate development investment in the northeastern region compared to the previous year, with new residential property sales dropping by 23.7%.
During the same period, national figures revealed a broader decline of 20.6% in real estate development investment and a 13.9% decrease in sales of newly constructed homes, with the northeastern areas experiencing declines that surpass the national averages.
In a report from Reuters earlier in September 2024, it was highlighted that housing tends to be the largest investment for Chinese households. The protracted downturn in the real estate market is eroding family wealth, simultaneously suppressing domestic consumption.
Lynn Song, the chief economist for China at ING Group, stated in an interview that when the largest asset a household owns depreciates each month, it becomes exceedingly difficult to anticipate that residents will feel confident enough to spend.