In recent years, the prices of school district housing in Guangzhou and Shenzhen have significantly decreased. The Guangzhou Light Industry State-owned Assets Management Company has listed 22 school district houses for transfer, with prices dropping sharply compared to last year. In Shenzhen, the older school district houses have seen even larger price declines, for example, the price of the Ba Gua Ling dormitory has dropped from a peak of 140,000 RMB per square meter to about 40,000 RMB per square meter, a decrease of over 70%.
Recently, the Guangzhou Property Exchange listed 22 school district houses in Guangzhou’s well-known Dongfeng East Road Primary School district, involving two communities, Dongfeng Plaza and Jincheng Gardens. Among these properties, the lowest listed average price for a house in Jincheng Gardens is only about 70,000 RMB per square meter, while the average selling price of second-hand houses of the same size in October last year was 90,000 RMB per square meter.
The transfer of the above 22 houses is carried out by the state-owned enterprise Guangzhou Light Industry State-owned Assets Management Co., Ltd. (referred to as Guangzhou Light Industry Asset Management), and this is not the first time that this company has transferred school district houses.
According to the “Daily Economic News” report, in May last year, Guangzhou Light Industry Asset Management also listed a batch of second-hand houses in Dongfeng Plaza for transfer, with a minimum listed average price of 98,400 RMB per square meter at that time. In contrast, the lowest listed average price for Dongfeng Plaza houses this time is 72,000 RMB per square meter, a decrease of 26.83%.
Several industry insiders have expressed that the overall decline in school district housing prices is a major trend, with some poorly located properties and those that had seen significant price increases in previous years experiencing a significant drop, exacerbating the selling pressure for some property owners.
A report from the Hopson Research Institute stated that in May, the net signed volume of second-hand residential housing in Guangzhou further decreased to 7,838 units, reaching a low point in over a year. As the peak demand for education gradually diminishes, the net signed volume for second-hand properties in Yuexiu District has seen consecutive declines for two months, remaining at a relatively low level in nearly a year.
Both Dongfeng Plaza and Jincheng Gardens are located in Yuexiu District, known for being a gathering place for established schools in Guangzhou. Dongfeng Plaza has undergone multiple phases of construction, with a wide span of building ages ranging from 1990 to 2015.
Transaction records from the Lianjia platform show that a 70-square-meter, 2-bedroom, 2-living room second-hand house built in 1998 was sold at 80,000 RMB per square meter in April this year, compared to an average selling price of 97,800 RMB per square meter during the same period last year. Another second-hand house of the same layout built in 2004 was sold for a total price of 7.68 million RMB in March last year, at a unit price of 111,300 RMB per square meter; while it was sold at 6.28 million RMB in April this year, at a unit price of 89,900 RMB per square meter, resulting in a total price drop of 1.4 million RMB.
Qiaolin Yuan, a residential community close to the prestigious schools Hua Yang Primary School and Guangzhou Middle School in Tianhe District, known as the “strongest school district housing in Tianhe,” has also seen a continuous decline in prices. In late March this year, a 112.6-square-meter unit of the same age was sold at an average price of 67,900 RMB per square meter, a decrease of 26,100 RMB per square meter compared to the same period last year. This particular property may have been sold at a reduced price, with a transaction period of only 14 days. On May 11th, the latest average price of a unit sold in the community was only 77,000 RMB per square meter, exhibiting a drop of 32,700 RMB per square meter compared to the same type of unit from last year.
A staff member from a real estate agency mentioned that the overall second-hand housing market in Guangzhou is declining, with school district housing being no exception.
Compared to Guangzhou, the price fall of some old and dilapidated school district housing in Shenzhen is even more pronounced.
School district housing in Shenzhen has been cooling down since the end of 2021. Futian and Luohu districts are where the prestigious and established schools are concentrated in Shenzhen, with Futian being the area with the highest transaction volume for school district housing in 2023. However, according to data from the Le You Jia Research Center, by the end of 2023, the prices of key school district properties in various districts of Shenzhen have fallen by more than 20% when compared to the peak period in 2021, returning to the levels of 2019-2020.
The Ba Gua Ling dormitory was built in 1983, primarily consisting of small units of around 30 square meters, originally used as staff dormitories. Stimulated by the expected urban renewal and the dual benefit of prestigious schools like Li Yuan Elementary School and Li Yuan Experimental High School being established, the prices at the Ba Gua Ling dormitory once soared.
In March 2021, multiple 29-square-meter units in the Ba Gua Ling dormitory were sold at over 143,000 RMB per square meter, with total prices around 4.2 million RMB, and transaction periods ranging from 8 to 14 days.
However, starting from 2024, the average selling prices in this community have been fluctuating between 40,400 and 56,900 RMB per square meter. The most recent transaction of a 27.96-square-meter unit was sold for only 1.13 million RMB, a decrease of over 70% from the peak price. In March, a 29-square-meter unit was sold for only 1.66 million RMB, a decrease of 2.54 million RMB compared to the peak in 2021.
Xie Linfeng, founder of Shenzhen Taofang Frontline, pointed out that the main reason for the decline in school district housing prices is the general downward trend in the market. The larger the previous price increases, the greater the current decline, with the Ba Gua Ling dormitory being a typical example. During the peak period, due to the favorable circumstances of Li Yuan East Campus, with small areas and low total prices, everyone rushed into the school district, causing prices to soar, with an average selling price once exceeding 140,000 RMB per square meter. Now facing the market downturn, many are opting to “exchange price for volume”.
Located in the same area of Ba Gua Ling is the Xufei Hualong Garden, where the average transaction price in April this year was around 41,200 RMB per square meter, compared to the peak of 119,600 RMB per square meter in 2021. This marks a decline of 65.6% compared to the highest point.