The real estate market in third- and fourth-tier cities in the central, western and northern regions of the mainland is performing sluggishly. In March, second-home prices in 10 of the 35 third-tier cities in central, western and northern China were lower than a year ago, with prices in Mudanjiang falling back to 14 years ago.
“In March this year, second-hand house prices in 10 of 35 third-tier cities, namely Mudanjiang, Nanchong, Beihai, Anqing, Luzhou, Jilin, Changde, Xiangyang, Jinzhou and Yichang, were lower than a year ago, all of which are central-western and northern third-tier cities, according to a May 3 report by China Business News. third-tier cities. Among them, Beihai fell 3.4% from a year ago; Nanchong fell 5.3%; and Mudanjiang fell 9.4%, almost 10%.
Since this year, the property market regulation in many hot cities has continued to tighten, and some hot third- and fourth-tier cities have also started to be included in the regulation.
Many third, fourth and fifth-tier cities in the central and western and northern parts of the property market as a whole are relatively cold, facing greater pressure to destock. Despite a rebound in the first quarter of this year, the overall new housing price index in third- and fourth-tier cities only returned to the level of two years ago.
It is worth noting that in March 2020, Mudanjiang’s second-hand house prices fell by 2.2% year-on-year. The performance of Mudanjiang’s property market, which has fallen sharply for two consecutive years, is of considerable concern. A report by the Shell Research Institute analyzed that its second-hand house prices fell back to the price level of five years ago in 2020, without considering inflation, while the drop in the first quarter of this year directly set back its prices to the level of 2007.
The Analysis Report on the Current Situation of Population Development in Mudanjiang City released by the Heilongjiang Provincial Bureau of Statistics at the end of July this year shows that the resident population of Mudanjiang City was 2.605 million as of the end of 2019. Compared with the data of the sixth census in 2010, the resident population has decreased by 194,000 in the past ten years, with an average annual decrease of 22,000.
The report points out that due to the underdeveloped economy, small economic volume, unreasonable industrial structure and low level of urbanization in Mudanjiang, the lack of large projects that can move the city’s economic development has led to a lack of attraction in terms of compensation, benefits and treatment, which has aggravated the population exodus, especially the exodus of young adults. Among them, the “post-90s” and “post-00s” have become the main force of the outflow population, with a proportion of 27.1%.
Mudanjiang is a typical case of a shrinking city in Northeast China.
Shell Research Institute found that since the ebb of shanty reform, the demand side of non-core third- and fourth-tier cities lacking fundamental support has shrunk significantly, forming a vicious cycle of “new homes – second-hand backlogs falling”.
The price index of second-hand and new homes in 70 large and medium-sized cities released by the National Bureau of Statistics of the Communist Party of China includes 4 first-tier cities, 31 second-tier cities and 35 third-tier cities. 13 of the 35 third-tier cities saw their second-hand home prices fall in 2020.
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