In a recent viral post, it has been highlighted that Liaoyuan in Jilin Province, situated in Northeast China, is being dubbed as a replacement city for Hegang. The housing prices in the urban area of Hegang, Liaoning Province, China, are approximately around 50,000 RMB (Chinese Yuan) and boast low living costs, making it a potential alternative to Hegang.
Hegang in Heilongjiang Province was formerly known as the cradle of the “lying flat” phenomenon. It was once a thriving resource city, flourishing due to its coal industry, but saw a decline with the fall of the coal industry. Without the support of the coal sector, Hegang’s economy plummeted, turning into a ghost town where housing remained unsought, and property prices dropped to the extent that one could purchase a house for merely thirty to fifty thousand RMB. However, due to its remote location, situated over 400 kilometers away from the provincial capital Harbin, many were hesitant to settle there.
Recently, a mainland Chinese blogger conducted an on-site visit and discovered that the housing prices and cost of living in Liaoyuan in the southern part of Jilin Province were comparable to Hegang. Houses priced around 50,000 RMB were plentiful, especially in the city center, often coming fully furnished for immediate occupancy. The starting taxi fare remains at 5 RMB, a rate that has not changed for over twenty years. These factors position Liaoyuan as a viable alternative to Hegang.
The video footage captured by the aforementioned blogger has garnered significant attention, swiftly becoming a top trending topic.
Reports suggest that the phenomenon of “Hegangization” where property prices resemble those seen in Hegang, Heilongjiang, is not limited to Hegang alone. Many regions across China are witnessing a trend towards more affordable housing, mirroring the situation in Hegang.
In Liaoyuan, much like Hegang, both cities saw prosperity during the coal boom in the sixties and seventies, with Liaoyuan being referred to as the “Little Shanghai of Northeast China” at one point. However, once the coal resources depleted, economic transitions, population decline, and stagnating property prices posed challenges for both cities. Today, Liaoyuan’s name is seldom heard.
As the smallest prefecture-level city in Jilin Province, Liaoyuan spans an area of just over 5,100 square kilometers, approximately one-third the size of Hegang. It is over 300 kilometers from Liaoyuan to Harbin, around 150 to 200 kilometers to Shenyang, and about 100 kilometers to Changchun.
According to the data from the seventh official population census of the Chinese Communist Party, as of midnight on November 1, 2020, Liaoyuan had a resident population of 996,903 people, roughly equal to that of Hegang.
With China’s economic slowdown leading to rising unemployment and dwindling savings among the populace, the ability of individuals to purchase homes and support families is diminishing. The continued decline of the real estate industry has resulted in widespread decreases in property prices. People have recognized that cities where homes are priced akin to cabbage are not solely confined to Hegang; such scenarios are emerging nationwide, leading to a trend of “Hegangization” of property markets across the country.
Not long ago, numerous young people from mainland China flocked to Fuxin City in Liaoning Province to purchase homes, mirroring the affordability of property prices akin to Hegang, with many opting to “lie flat” there.
Mainland Chinese financial media outlets have reported the proliferation of cities witnessing a “Hegangization” of property prices across 25 provinces nationwide, with provinces like Jing-Jin-Ji, the Pearl River Delta, and the Chengdu-Chongqing economic belts encircled by such cities.
For instance, in Zhangjiakou City, approximately 100 kilometers from Beijing, one could secure a 60-square meter, two-bedroom apartment for 60,000 RMB, with dozens of such properties priced around 100,000 RMB available locally.
Within the Chengdu-Chongqing metropolitan area, properties similarly priced are not uncommon. In Longquanyangguang City, located over twenty kilometers from Tianfu Square in the city center of Chengdu, some property prices have not risen in over a decade, with certain unit prices even dropping by sixty percent in recent years.
Guangdong, China’s leading economic province, houses five cities experiencing “Hegangization”: Sihui, Heshan, Jieyang, Heyuan, and Qingyuan.
Huizhou in Guangdong, due to its proximity to Shenzhen and a plethora of seaside apartments, once witnessed a thriving real estate market. In 2021, a newlywed couple bought an apartment for 11,000 RMB per square meter, only to see its value plummet by 45.5%, now priced at a mere 6,000 RMB per square meter.
The drastic fall in property prices has placed significant pressure on this couple, especially given their monthly mortgage payment of 9,000 RMB, a burden becoming increasingly unmanageable.
So far, the average property prices across China have plummeted nearly 30% from their peak in 2021, triggering a worsening debt crisis, leading to a slew of unfinished projects. Homeowners who invested in these incomplete properties not only end up without a home but are also forced to repay their home loans, resulting in significant hardship.