(Yicai) Dec. 21 — The price of seaside residences in Huizhou, a coastal city in southern Guangdong province with beautiful scenery and just one hour’s drive away from the hi-tech hub of Shenzhen, have cratered in the last few years as property sales stall amid a sluggish real estate market.
Most people buy seaside properties as a form of investment, so demand is influenced by changes in the market environment, said Yang Hongxia, general manager of the China Index Academy’s South China branch.
Compared to the astronomical price of homes in Shenzhen, a seaside property at Huidong country, which is part of Huizhou, used to only cost around CNY10,000 (USD1,400) a square meter and so the area was very popular among Hong Kong residents and those working in Shenzhen.
But slack sales means there is now as much as 6 million square meters of newly built real estate up for sale in Huizhou’s Huiyang district and Huidong county, according to China Index Academy. It would normally take more than two years to reduce this inventory.
“In the context of great downward pressure on the macroeconomy, in order to speed up sales to get a return on their investment, most developers have no choice but to slash prices to lure buyers,” Yang said.
The average price of pre-owned homes along Huizhou’s Shili Yintan, which translates as ‘Ten Miles of Silver Beach, has slumped by 36 percent from the peak in 2021 to CNY6,814 (USD954) per square meter and that of second-hand properties in Xunliao Bay, also known as “China’s Maldives,” has tumbled 32 percent to CNY9,442 per square meter, according to online real estate firm Anjuke.
But these areas are still faring quite well compared with other parts of the city. For instance, the owner of a 97-square-meter house located less than one kilometer away from the coast is selling his property for CNY470,000 (USD65,798), less than half the price he paid for it back in 2015, a real estate agent who helped to sell the property told Yicai.
The price of new homes is also sliding. Houses in a development by Country Garden in Shili Yantan are now selling for CNY6,625 (USD928) per square meter and the developer is even throwing in a set of furniture. But when sales at the project started in 2018, homes were selling for CNY12,500 (USD1,751) per square meter.
Those who buy houses by the sea want good nearby public transportation infrastructure, such as airports and high-speed railway stations, convenient amenities and they want to know whether there are other similar developments in the area that will make their properties hard to sell, said Li Yujia, researcher at the provincial residential policy research center of Guangdong province. Huizhou’s seaside properties all need further improvement in these respects.
Editors: Tang Shihua, Kim Taylor