Chinese cities are divided into various categories reflecting their importance and management style. There are four central government cities 直辖市, Beijing, Shanghai, Tianjin, and Chongqing. A circle of fifteen cities includes strategic cities whose top leaders are appointed by Beijing. They are referred to as sub-provincial cities 副省级市, although all of them have provincial capitals. The Diyicai website 第一财经 has carried out a study on the average real estate prices of the cities in this group.
Price in yuan per square meter ( 10 000 yuan = 1520 USD on 25/11/2020) per city:
Shenzhen is in the lead
Shenzhen, unsurprisingly, leads with a square meter at 78,722 yuan (12,000 USD) in October 2020, 1.6 times higher than the second city, Xiamen, in Fujian province, facing Taiwan and 7.6 times higher than Changchun in Jilin province in the northeast. Shenzhen recorded an increase of 15.5% year-on-year and 83.6% in five years. Despite the measures taken to stem the price surge, the market is not calming down. It must be said that there is a whole panoply of parries to respond to government measures, and some financial institutions are not lacking in creativity to use the king of leverage in China, credit. One wonders whether there is a real willingness to contain prices on the part of the central government. Steps are being taken, but on the other hand, the floodgates of credit are opening steadily. On the other hand, the construction and real estate sector is a significant contributor to public finances, and some municipalities are highly dependent on it.
Supply and demand are quite unbalanced. Shenzhen has a positive net migration of 370,000 people, while new construction has reached an annual average of 81,000 housing units over the last three years.
.Xiamen comes after Shenzhen in this ranking and fourth place nationally, after Shenzhen, Beijing, and Shanghai. It has the third-largest GDP in its province, Fujian, behind Quanzhou and Fuzhou, and ranks 33rd nationally with a population that is 27th in size. Because of its advantages in education and urban development, Fujian’s capital has attracted people from neighboring cities with high purchasing power. As a result, the housing supply is not keeping pace with population growth.
Guangzhou, the capital of Guangdong and a leading city, ranks third with an average price of 38,351 yuan, less than half that of neighboring Shenzhen in the same province.
Map of Fujian :
Nanjing and Hangzhou, the two capitals of the Yangtze Delta’s economic provinces (Jiangsu and Zhejiang), exceed 30,000 yuan. On the other hand, Ningbo, and Qingdao, on the east coast, ranking sixth and seventh with more than 20,000 yuan.
Map of Zhejiang :
After Qingdao, Wuhan in the center is eighth with 19,021 yuan per square meter and Chengdu ninth. They overtake Jinan, the capital of Shandong, the third economic province. It is noteworthy that Wuhan and Chengdu not only have the highest housing price levels in the mid-west, but they also contain the two most critical high-tech hubs in the region. The level of industrial development is an essential basis for house prices.
Overall, house prices in this group of 15 cities show a north-south division, with the leading pack in the Southeast and the northeast’s trailing pack. South China is followed by the Yangtze Delta, Shandong, and the Central West.
Changchun, at 10,303 yuan per square meter, and Harbin, at 10,990 yuan, show lower price levels than many small and medium-sized cities in Jiangsu, Zhejiang, and Fujian.
The difference in house prices between the northern and southern cities is related to recent years’ economic development, especially the development of emerging industries and population flow and the financial structure and topography. The northeast region consists mainly of plains, while the South, especially the southeast coast of Zhejiang, Fujian, and Guangdong, is more mountainous and less flat. The supply of many cities is limited.
On the other hand, the regional differentiation of real estate dynamics is evident as the Pearl River Delta and the Yangtze River Delta are advancing, while Shandong, the Northeast, and other places are retreating. According to the data, in October, Jinan’s housing prices were down 0.3 percent and 2.7 percent year-on-year, in Qingdao down 0.4 percent and 2.8 percent year-on-year, in Changchun down 0.5 percent and in Harbin down 0.4 percent year-on-year. The development of new industries and population mobility plays a significant role in these fluctuations.
These figures allow us to perceive the dynamics of the economy and the crucial differences between the prosperous regions of the South, particularly those of the Northeast, which have not been able to change their mode of development, while the central-west has emerged. You can read related articles to measure the factors of regional dynamics.
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27 November 2020