In recent years, more and more Chinese cities are experiencing a phenomenon known as “Hegangization,” where real estate prices plummet dramatically. One such city feeling the effects is Qingyuan in Guangdong Province. The topic of a 150,000 RMB (Chinese Yuan, equivalent to about 23,242 USD) two-bedroom, two-living-room property in Qingyuan has attracted market attention and has become a hot search topic. Many people are expressing that with such affordable housing prices, Qingyuan now has its own version of the “Hegang phenomenon.”
The property in question is located in Wanke City in the northern part of Qingcheng District, Qingyuan City. It is part of the first phase of the development, completed in 2012 with a 12-year-old construction age. The property consists of two bedrooms, two living rooms, and one bathroom, covering an area of 69.12 square meters. The transaction for this property took place on July 12 this year, with a final selling price of 155,000 RMB, equivalent to 2,243 RMB per square meter.
Back in March 2012, Guangzhou and Qingyuan signed a cooperation framework agreement known as the “Guangzhou-Qingyuan Cooperation Framework Agreement,” officially introducing the concept of “Guangqing integration.” Subsequently, Qingyuan saw an influx of property speculators, leading to a surge in housing prices from a few thousand RMB per square meter to over ten thousand RMB per square meter. For instance, in 2017, the unit price in Meilin Lake was around 8,500 RMB per square meter, escalating to 11,000 RMB per square meter in 2018.
The real estate market in Qingyuan remained robust until the onset of the pandemic. Against the backdrop of a downward trend in the Guangzhou property market in recent years and Qingyuan’s own population outflow, housing prices in Qingyuan have continued to decline.
According to data from “Beike Find Properties,” the average price per square meter in the same community as the aforementioned property is 5,247 RMB. Prices vary based on the layout and orientation of the units, with the transaction prices for two-bedroom units like the one mentioned generally averaging around 3,000 RMB per square meter.
Similarly, properties in the “Guangqing” area like Hengda Yinhu City, located alongside Wanke City in the northern part of Qingyuan, have also experienced significant price drops in the past two years. According to real estate platforms, a recent transaction in August for a 3-bedroom, 2-living-room property in this area was priced at 500,000 RMB, with an average of less than 4,000 RMB per square meter – a significant decrease compared to similar properties selling for 10,000 RMB per square meter during the real estate boom of 2019.
Apart from the Guangqing area, sales data for other areas of Qingyuan in the first half of this year also indicated a decline in the property market performance. According to the Qingyuan Statistics Bureau, from January to May, the sales area of commercial housing in Qingyuan was 1.297 million square meters, a decrease of 41.4% compared to the same period last year. The sales area of residential housing was 935,000 square meters, down by 49.3%, with total sales reaching 7.86 billion RMB, a decrease of 45.1% year-on-year.
Yan Yuejin, Deputy Director of Shanghai E-House Real Estate Research Institute, expressed to “Interface News” that the real estate markets in first-tier cities like Guangzhou and Shenzhen are under considerable pressure, coupled with a high potential supply of housing sources in the surrounding areas. As a result, satellite cities like Qingyuan, Dongguan, Huizhou, and Foshan in Guangdong Province are also experiencing price reductions.
This year, some key cities in China have relaxed restrictions on purchasing existing homes in the city center. While the overall transaction volume of second-hand homes remains at relatively high levels, prices are continuously adjusting.
Statistics from the E-House Research Institute show that in July, the transaction volume of second-hand residential properties in 22 key cities nationwide was 165,349 units, a decrease of 4% compared to the previous month but an increase of 31% year-on-year.
Regarding prices, in July, the average transaction price for second-hand homes in 10 key cities (Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, Hefei, Nanjing, Tianjin, Wuhan, and Chongqing) was 26,073 RMB per square meter, down 1% month-on-month and 7% year-on-year. This marks one of the lowest points in the current cycle of price adjustments for second-hand homes in these cities, with the average price being 26,013 RMB per square meter in May, the lowest level recorded.