In China, bet on forgotten cities to get the best real estate deals

To buy an affordable apartment, Fontana Fang had to look far and wide: in northern China, near the Russian border, she found her happiness… 4,000 kilometers from her home.

In big Chinese cities, “unless I come from the elite, I don’t see how young people can earn enough to buy a house,” says the 29-year-old woman who works in marketing.

Like him, many young people scared off by real estate prices choose to buy in remote and declining industrial areas, where home ownership is still possible.

Fontana lives in Guangzhou with her husband and two children, but the apartment is owned by the couple’s parents.

In this metropolis of 15 million residents in the country’s south, a square meter typically costs more than 100,000 yuan (12,400 euros), a price unaffordable for many.

But last winter, Fontana discovered Hegang, a mining town in the northeast, where the temperature was minus 20 degrees at the time.

Residential buildings in Hainan in northeast China on July 4, 2023 (AFP – Jade Gao)

In this small city (1.4 million inhabitants), the couple had to pay only 40,000 yuan (5,000 euros) for an apartment on the top floor with a covered balcony and a breathtaking view of the hills.

His project? Renovate it to make it their second home when they want to escape the sweltering heat of Canton.

“I was incredibly surprised. I didn’t expect to be able to buy a house for so little,” exclaims Fontana.

– “There’s nothing” –

There are hundreds of cities like Hegang in China, which had a rich industrial past but are now forgotten.

This is the case for Fuxin in Liaoning (northeast) province or Rushan in Shandong (east), which have seen their population decline since the 1980s, while government reforms have shifted China’s center of economic gravity to the southern and eastern coasts.

Advertisements for renting apartments in residential buildings in Hegang, northeast China, July 4, 2023 (AFP - Jade GAO)
Advertisements for renting apartments in residential buildings in Hegang, northeast China, July 4, 2023 (AFP – Jade GAO)

According to official statistics, Hegang lost 15% of its residents between 2010 and 2020.

Now these declining cities attract a younger generation, attracted by their low real estate prices and comfortable, affordable lifestyles.

A young man who bought an apartment in the mining town of Gejiu in Yunnan (south-west) for 68,000 yuan told AFP he did so “mainly with nothing to do”.

He refers to the so-called “tang ping” (literally, “lying flat”) attitude, a counterculture that has emerged in China in recent years that encourages young people to do as little as possible and to reject social pressures related to work.

Leaders of the ruling Communist Party have strongly criticized the move, calling it contrary to the values ​​of hard work and innovation.

The new owner of Gejiu, who spoke on condition of anonymity, said that he “hasn’t even thought about work” since he moved here: “I’ll stay here, live on whatever savings I have, and find a temporary job in a bigger city when I don’t have any.”

– “Fashion shall pass” –

During a recent visit to Hegang by an AFP team, street vendors offered fruit, vegetables or cookies for as little as a few cents, while pensioners played cards in front of their homes.

“There’s something spiritual in this slowness,” says Cathy Cato, 28, who also recently bought an apartment in Haigang.

Residential buildings in Hegang in northeast China, July 4, 2023 (AFP - Jade Gao)
Residential buildings in Hegang in northeast China, July 4, 2023 (AFP – Jade Gao)

“In (wealthy) cities, we only talk about work and business all day,” adds the young woman, who previously lived in Xi’an and Zhengzhou, the two big cities in the center.

“But people here don’t do that much, because the chances of making a lot of money are small anyway.”

Hegang had made a fortune from coal mines, but now its finances are weak: the municipality is struggling to pay off its debts and the government came to its rescue in 2021 through “restructuring”.

According to a local administrator, this measure averted bankruptcy, but the city regularly pays its employees late.

For Shen Wenxin, originally from Hegang, where he recently returned to open a cafe, “the more people come, the better”.

“But they represent only a small part of the economy,” he added.

Other residents contacted by AFP are also skeptical of the city’s ability to find another youth to keep up with the newcomers.

When Max Chu went to college, she left Hegang for Beijing. She works in the capital and now has no desire to return.

“After a while, the fashion[of visiting these industrial cities, editor’s note]will pass”, she predicts, “people will forget them”.

Add a Comment