A sign reads "snow county, Chongli" at a construction site in Chongli county, Zhangjiakou, Northeast China's Hebei Province, on August 16. The county will host several events for the 2022 Olympic Winter Games. (Photo: Xie Jun/GT)
The housing high jump
On July 31, Beijing and its neighboring city to the northwest, Zhangjiakou in North China's Hebei Province, won their joint bid to co-host the 2022 Olympic Winter Games. This announcement has stimulated the real estate market in Zhangjiakou, especially Chongli, a county near the central part of the city. Housing prices there have jumped in August as non-local buyers snap up homes for their investment value.
Earlier this year, Beijing resident Liu Xia was having a hard time deciding where to buy a second home.
For months, the 36-year-old woman had been vacillating between two potential locations: Zhangjiakou, Northeast China's Hebei Province, and Qingdao, East China's Shandong Province. Both places were popular tourism destinations frequented by her family.
Liu's ambivalence evaporated on July 31, when news broke that Beijing and Zhangjiakou won a joint bid to co-host the 2022 Olympic Winter Games.
On August 8, she drove to Chongli, a county in Zhangjiakou where several events of the Winter Games will be held, and bought an 800,000 yuan ($125,120) apartment next to a local ski park.
"I am sure the apartment has the potential to grow in value in the future, with the infrastructure construction and added population that will come with the Winter Games," Liu told the Global Times on Friday.
Buyers like Liu have been quick to invest in Chongli since the announcement.
Wang Zhisha, a real estate agent in Chongli, described it as a boom.
For example, she said that 15 apartments at a local residential development called Tang Inn Hot Spring were sold on August 1, the day after the announcement.
Until that point, business had been slow. "In 2014, when the housing market was weak, property developers in Chongli couldn't sell that many houses over several months," Wang told the Global Times on Saturday.
From gloom to boom
The real estate market in central Zhangjiakou fell into a funk a few years ago. The news website thepaper.cn reported on August 11 that the city's housing market has been in a recession since 2012. In 2014, real estate investment fell 5 percent year-on-year.
With the announcement that the city will host the Winter Games, there have been signs of a turnaround.
"The real estate market was still quiet on July 31. But on August 1, the city's housing prices started to shoot up," said Yang Jingming, a real estate agent in Zhangjiakou.
Yang works out of a small office on Nanzuanshi Street in Qiaodong district, one of the city's more developed areas. Yang's firm is focused on commercial real estate projects. Prices have gone up across the real sector since the Winter Games announcement, she said.
At the nearby Longshan Shuijun residential development, for example, the price of an apartment jumped from 6,200 yuan a square meter in July to 7,200 yuan a square meter in August, Yang said.
A marketing assistant surnamed Jia at Longshan Shuijun development disputed the size of the price increase.
Jia said that the price only "went up slightly in August," though the developer plans to suspend sales shortly to consider adjusting prices.
In the second-hand housing market, prices have risen about 15 percent on average, Yang said.
"Many sellers whom I'm working for have raised the price of their homes or took their homes off the market to wait and see where the market goes," she told the Global Times on Friday.
However, Yang said that the Winter Games news is a double-edged sword for the local housing market.
For some real estate projects, the news means greater demand. Longshan Shuijun, for example, has received about 10 telephone enquiries and eight visits each day in August, compared with about three visits a day at the beginning of July, Jia told the Global Times on Friday.
Yang stressed that the price rise is a blow to the second-hand housing market, as many local residents are unaccustomed to the change.
"Prices are shooting up, but customers are shrinking back. It makes things tough for my business," she said.
Furnished for sale
In Chongli, the demand for furnished apartments is also on the rise. Along Yuxing Street, there are about 10 clusters of furnished apartments.
The real estate broker Wang said that the average price for the apartments has leaped from about 4,000 yuan a square meter around 2009 to more than 10,000 yuan a square meter in August.
The price hike has mostly been pushed by non-local buyers, especially buyers from Beijing, Wang noted.
An sales person from Eastern Alps, a furnished apartment development, who refused to be named, told the Global Times on Saturday that more than 80 percent of their owners are from Beijing.
Liu, the Beijing resident who bought a furnished apartment in Chongli, also found that most of her neighbors are from Beijing.
"This is good because the atmosphere is very friendly and familiar to me," she said.
After the Winter Games announcement, the frenzied interest from Beijing buyers has only grown.
China Central Television reported on August 4 that some Beijing residents have bought up to three furnished apartments in Chongli in August.
"Many of the furnished apartments sellers I know were able to sell about seven apartments a day in the week following the Winter Games announcement. Some of the most prized neighborhoods in Chongli are almost sold out now," Wang said.
Reasons for caution
On Friday, the Shijiazhuang-based Yanzhao Evening News quoted a real estate industry insider who said the increase in prices will likely be temporary.
From 2015 to 2022, with the launch of new government policies and the self-adjustment of the real estate market, prices should return to normal.
Yang also cautioned that there's no guarantee that investing in housing in Zhangjiakou can generate great profits.
"There are still many problems that need to be solved in the city, such as the high unemployment rate and low average income. I don't think the Winter Games can completely solve the city's economic difficulties, which will prevent the local real estate market for experiencing a long-term boom," Yang noted.
Yang said she hopes housing prices will stabilize soon, otherwise it will be harder for locals to afford a place to live.
"But it's hard because once prices go up, they are reluctant to fall," she said.
