With the decline in China’s real estate market, the once high-priced school district housing market is also falling. The prices of school district housing in Nanjing and Hangzhou are generally decreasing, with some seeing steep drops.
According to the “Times Finance” news on August 24th, recently, a detailed record of transactions in Nanjing school district housing from June to July showed that some secondary school district housing in Nanjing had a minimum transaction price of around 1.4 million yuan, even dropping to just over a million yuan. Some primary school district housing in the second-tier areas of Nanjing can be priced below a million yuan.
In Qinghe New Residence Community, which is zoned to Jinling Huiwen Elementary School and Jinling Huiwen Middle School, in July this year, a 62.7 square meter two-bedroom apartment was sold for a total price of 2.33 million yuan, with a unit price of 37,000 yuan per square meter. In comparison, the same unit type sold in 2021 for a total price of 5.7 million yuan, at a unit price of 92,000 yuan per square meter. Over three years, prices have dropped by about 60%.
Real estate agent Li Yuan (pseudonym) revealed to the media that in 2021, the transaction price of mid-floor units in this community was around 100,000 yuan per square meter, whereas now, the transaction prices are generally around 52,000-53,000 yuan per square meter, showing a significant decrease.
Another agent, Zhang Lin (pseudonym), stated, “From 2019 to 2021 was the peak period for Nanjing school district housing market. Since 2021, prices have dropped by about half. The transaction volume in our area has decreased by about 20-30%. Previously, there were buyers who would purchase school district housing two to three years in advance, but now this group of buyers is basically nonexistent.”
Not only in Nanjing but also in Hangzhou, school district housing prices have plummeted.
According to the “Qianjiang Evening News” on August 23, in the “top school district housing” area of Hangzhou, the Chongwen Apartment in Xihu District had prices exceeding 100,000 yuan per square meter. However, on the 23rd, a 110.7 square meter house in this area was sold for 6.8 million yuan on the Ali Asset platform, equivalent to a unit price of about 61,400 yuan. In early 2021, a similar 106.57 square meter Chongwen Apartment sold through a property auction for 12.7 million yuan, at a unit price of around 119,300 yuan. The sharp drop in prices is stark when comparing the two transactions.
As for the reason behind the drastic price drops in school district housing, “Times Finance” believes it is partly due to the overall cooling of the second-hand housing market and the weakening of the concept of school district housing. Real estate agent Wang Mian (pseudonym) stated, “The concept of school district housing has now faded. For some top primary schools, the school districts are expanding, incorporating ordinary residential neighborhoods. The value of school district housing has significantly decreased. As for second and third-tier school districts, house prices are basically similar to non-school district housing.”
Regarding the significant market price drop of school district housing, over a hundred netizens have posted comments.
A Tencent user, jpx31l5, thinks, “With declining birth rates, increased university enrollments, poor economic conditions, and changing parenting perspectives among post-90s parents, the concept of school district housing will continue to diminish.”
A netizen named “Yundan Fengqing” believes that school district housing prices “have not yet hit bottom and are essentially speculative products. Even in worse schools, good students can be found.”
Another netizen, “Tonight There’s a Blizzard,” expressed, “Spending five to six million on school district housing, even if the child graduates and earns a starting salary of 200,000 yuan, without spending a cent, it would take 30 years just to earn back 6 million yuan. People will have aged by then.”