Property prices in Xishuangbanna fell back to four years ago with 80% vacancy rate

As a tourist city on the mainland, Xishuangbanna’s property prices were once speculated several times higher, but now its property prices have fallen back to four years ago, and the vacancy rate once reached 80%.

Xishuangbanna is the only tropical rainforest city on the mainland, which has attracted many famous real estate companies such as Vanke, Sunac and Greentown to settle down and launch several cultural tourism projects with a volume of over 1,000 mu or even over 10,000 mu.

According to the Daily Economic News on April 28, Xishuangbanna can be said to be a city “ripe” for real estate. Data from the Xishuangbanna Bureau of Statistics show that by the end of 2018, Xishuangbanna had attracted more and more developers to set up tourism real estate, with an investment scale of more than 150 billion yuan (RMB, same below).

As many as six of the cultural tourism real estate projects currently on sale in Xishuangbanna cover an area of more than 10,000 mu, and two of them cover an area of 20,000 mu or more, the report said. There are even more projects with an area of over 1,000 mu.

The influx of developers has pushed up local property prices. Starting in August 2017, house prices in Jinghong, Xishuangbanna began to soar, rising from more than 4,000 yuan per square meter/square meter to nearly doubling in three months.

By the second half of 2018, house prices in Xishuangbanna reached their peak, with the average price of new houses in Xishuangbanna reaching RMB 11,747 per square meter in July 2018, even surpassing the average price of new houses in the provincial capital Kunming of RMB 11,382 per square meter in the same month, according to Anjuke data.

However, the per capita disposable annual income of the city’s permanent residents is RMB 29,661, making high prices out of their reach. For investors from all over the country, Xishuangbanna is very attractive in terms of natural environment, prospect and price, and the price is cheaper than Hainan, another vacation destination.

In this regard, Zhou Dayan, director of Yunnan University of Finance and Economics Real Estate Investment and Financing Research Center, said, “Xishuangbanna is developed with high intensity, which is actually real estate development, and tourism real estate is just a slogan and gimmick.”

Zhou Mingqi, founder of Jingjian think tank, believes that “as a long-distance tourism destination, it needs to be supported by a variety of vacation business in order to have long-term attraction to tourists.”

Zhou Mingqi said that in addition to the natural environment and climate, the success of cultural tourism real estate lies more in the creation of lifestyle. He said, “Sojourn is longer than a vacation stay, often for several months, and requires a rich business layout and reasonable distribution and consideration according to local regional functions and humanities and geographical environment characteristics, in order to achieve tourism and real estate to accompany each other, drive the surrounding industries and employment, and benign and sustainable development.”

Mr. Liu, a northeasterner engaged in local B&B, purchased a property in the area, which is backed by a large mountain with beautiful scenery, but Mr. Liu said that it is inconvenient because of the lack of supporting facilities, and he only goes home to live a few days a month.

Zhou Mingqi believes that similar to Xishuangbanna, a tourist city with a small local population and low demand, there is often a lot of speculative demand in the real estate market, “the big rise and fall in a short period of time also reflects the existence of a certain bubble in the Xishuangbanna property market.”

And after experiencing a frenzy, Xishuangbanna house prices began to fall in 2019 seems to confirm this. 2019, Xishuangbanna house prices suffered a precipitous decline, with some projects nearly decimated compared to the highest point. Data treasure information shows that Xishuangbanna house prices in 2019 were 8,109 yuan/square meter, down 12.24%, ranking second among mainland cities, after Sanya; Xishuangbanna property market continued its downward spiral in 2020, down 10.1% compared with 2019.

After two consecutive years of more than 10% decline, the average price of new houses in Xishuangbanna in April this year was 7,748 yuan per square meter, about the same as the price in 2017, which has fallen back to 4 years ago, according to Anjuke.

Because most of those who buy houses to live are foreigners coming here for vacation, the housing vacancy rate in Xishuangbanna remains high. Liu operates a B&B in the seventh phase of the Rongchuang Tourism Resort, which was sold out and closed as early as 2015, and currently has an occupancy rate of only 30-40 percent. “When most of the residents go back after the water festival in April, there will be even fewer people here.” Liu said.

Surveys show that the vacancy rate of houses in Xishuangbanna alone exceeded 80 percent in 2018. Moreover, there are numerous cultural tourism real estate projects in Xishuangbanna that are being developed or planned since 2019, meaning that a large number of housing units will enter the market in the future.

The report said that the slow demolition of local cultural tourism real estate, the failure of supporting facilities to keep up and the high vacancy rate have put some developers under great financial pressure. At the same time, the long construction period of many large cultural tourism real estate project sites has also seriously affected the air quality that the local area is proud of.

The report attracted many netizens to watch and leave comments.

Netizen “Rag! said, “A nice tourist place has turned into a big construction site. The year before last, there were bulldozers everywhere along the Lancang River, and the cultural tourism project of Sunac was full of big piles of dirt and dust, so we can still feel some fresh air when we go to the mountains.

“Solo fishing cold river” also think: “are built into the house also lost the characteristics of Xishuangbanna.”

“momo” said: “a serious waste of resources, but also rotten, tourists go to see where there are built half of the house.”