Soaring coal prices ignited real estate anxiety in Yulin, a third-tier city
Author: Ma Yifan
Among the cities where housing prices are leading the country, there is an unexpected small city-Yulin, Shaanxi. Not only is there no name for this small city among the 70 cities that the National Bureau of Statistics focuses on monitoring housing prices, but even in the list of cities on the country’s largest real estate transaction service website “Shell Finding a House”, there is no place in Yulin.
Speaking of coal producing areas, most people think of Shanxi. But in fact, in the first half of 2021, Yulin produced 266 million tons of coal, making it the second largest coal-producing city in the country. In the first ten months of this year, thermal coal prices soared by 151%. The development of the property market in Yulin, a city of energy known as “Kuwait of China”, is in line with the development curve of its energy industry. Along with the rise in coal prices, citizens are rushing for commercial housing, and the property market is moving against the current. The average price of second-hand housing has soared by more than 20% in the past year. On the “People Asking Politics” platform officially hosted by Yulin, there have been over a hundred complaints about “housing house prices soaring” and “housing prices are too ridiculous”.
Anxiety about not being able to buy a house
“Buying a house in our Yulin is not a simple matter. Certain popular properties cannot be bought under trust relationship.” Zhao Rui, a home buyer who was born and raised in Yulin, told China Business News reporter.
She said that just last month, the “Shengjing Heyuan” located in the Xisha area of Yulin opened for sale, with a price ranging from 10,000 to 12,000 yuan per square meter, and a subscription fund of 400,000 yuan was required. The education and supporting facilities in the area were average. The opening price is already high in the eyes of the locals, but it is still hard to find a room.
Along with the popularity of new developments, housing prices in Yulin have also soared overall. According to China House Price Market, the average price of listed second-hand houses in Yulin City in October 2021 was 10,169 yuan per square meter, up 22% year-on-year; in September, the average price of urban housing prices in Yulin City rose 5.41% month-on-month.
The housing price increase in Yulin has even surpassed that of Xi’an, the provincial capital. Shaanxi is a “strong capital” province. The provincial capital Xi’an has siphoned a lot of resources. However, according to the house price quotation network, the average listed price of Xi’an in October this year was 16,226 yuan per square meter, a year-on-year increase of only 1.53%.
According to Anjuke and 58.com’s “Huiyan” house price big data system, the average price of second-hand housing in Yulin so far is 9,470 yuan per square meter, a year-on-year increase of 20%. In the past three months, Yulin has experienced a cumulative increase of 7%, which ranks among the highest in the country and is a leading city.
According to the data of the “Smart Eye” system, in the past three years, housing prices in Yulin have gone out of an upward curve. Three years ago, the average price was 6,237 yuan per square meter, which has risen by 52% so far.
Among the 10 prefecture-level cities under the jurisdiction of Shaanxi Province, Yulin’s housing prices are second only to Xi’an, and slightly higher than Xianyang City, which has terracotta warriors and horses next door to Xi’an.
On the “People Asking Politics” platform officially hosted by Yulin, there have been over a hundred complaints about “housing house prices soaring” and “housing prices are too ridiculous”.
A recent complaint about housing prices was published on October 28 with the title “Problems of real estate chaos and high housing prices in Yulin.” There was a phenomenon that the real estate just opened for sale in seconds, and then the circle of friends is full of posts about price increase and transfer indicators, so that people who really want to buy a house cannot buy a house.”
Another netizen said on the “People Asking Politics” platform that “Yulin’s housing prices continue to skyrocket, and relevant departments have done nothing.” This netizen said that the area of 6,000 yuan per square meter opened in Yulin in 2018 has now risen to 12,000 yuan per square meter. Three years ago, the area of 7,000 yuan per square meter has now risen to 15,000. 18,000 yuan/square meter.
Many netizens have expressed the hope that Yulin will follow the example of Shenzhen and Shanghai and introduce guidelines for second-hand housing prices.
The Housing and Urban-Rural Development Bureau of Yulin City responded that Yulin’s infrastructure, living environment, and employment conditions have continued to improve, and the population of counties and districts has moved closer to the central city, which has objectively led to an increase in the transaction price of second-hand housing. Whether or not to limit prices will be regulated in the real estate market in the future. Zhongzhong puts forward suggestions to the municipal party committee and government at the right time, and currently there is no guiding price policy for second-hand housing.
Zhao Rui told China Business News that as long as there are popular real estates in Yulin, Moments will often be screened by the intermediary. The content is “number fee” and “indicator fee”.
“Everyone knows that the property market across the country is going down, and now is the era of’housing to live without speculation’, but Yulin people’s enthusiasm for buying a house and anxiety about not being able to buy a house are still unabated.” Zhao Rui said.
Soaring coal prices push up housing prices
Yulin is located in the northernmost part of Shaanxi Province, at the junction of the Loess Plateau and the Mu Us Sandy Land. For people who don’t know Shaanxi, “Loess Plateau” and “desert” are synonymous with poverty and barren land. However, in Shaanxi Province, Yulin has been dubbed the title of “Nouveau riche in northern Shaanxi”.
Since the state launched large-scale energy exploration in Yulin in the 1980s, the fate of Yulin people has completely changed.
On average, Yulin contains 6.22 million tons of coal, 14,000 tons of oil, 100 million cubic meters of natural gas, and 140 million tons of rock salt per square kilometer. The combination of its resources is rare at home and abroad. Yulin City has 54% underground coal, which accounts for about one-fifth of the country’s reserves.
In 1998, the construction of the national energy and chemical base in northern Shaanxi was officially launched. In 2000, Yulin jumped from a county-level city to a prefecture-level city. This energy city has just started, with a GDP of only more than 10 billion yuan at that time.
After becoming a prefecture-level city, Yulin has experienced the “golden ten years” of coal. With coal prices soaring, Yulin’s total economic volume has increased by leaps and bounds. The “Second City of Shaanxi” next to Xi’an.
But then, my country’s coal consumption growth rate began to slow down rapidly, coal prices fell sharply, the market entered a period of deep adjustment, and Yulin, with a single industrial structure, was hit hard for a time. In 2015 and 2016, Yulin’s GDP was lower than in previous years, showing a state of negative growth.
The development of Yulin’s property market is in line with the development curve of its energy industry.
In 2013, the Yulin property market reached a historical peak, and there was also a crazy looting scene where a house was hard to find. However, with the decline in coal prices and the decline in economic aggregates, the Yulin property market fell into a trough in 2015 and did not begin to recover until 2018.
The reason for the initial recovery is similar to that of most other third- and fourth-tier cities across the country-demolition and shed reform. The government has injected a large amount of money to implement monetization resettlement of shed reform. The housing market in Yulin has gradually heated up under the stimulus of the shed reform, but it has not returned to its high point in 2013.
Yulin has a small population, only 3.62 million people, which is about a quarter of Xi’an’s population. Its per capita GDP in the first three quarters reached 99,000 yuan, ranking first in the province in Shaanxi, close to Hefei and Jiaxing in the east. city.
In addition to the demand brought about by the shed reform, the urbanization population planning has pushed up the housing price. According to the Fourteenth Five-Year Plan for the National Economic and Social Development of Shaanxi Province and the 2035 Long-Term Goals, the urban area of Yulin has a population target of 1 million in 2025, but the urban population in 2019 is less than 60. ten thousand.
In the past year, the Yulin property market has once again been robbing houses, and behind it is another round of the coal industry cycle.
The Shaanxi Provincial Development and Reform Commission stated on November 4 that since the beginning of this year, affected by factors such as rising international commodity prices and sharp increase in demand for raw materials, the coal market in Shaanxi Province has strong demand and prices have continued to rise. The committee’s monitoring of thermal coal prices in Xianyang and Yulin showed that thermal coal rose from 509.75 yuan/ton in January to 1,280.60 yuan/ton in October, an increase of 151%.
According to data from the local Bureau of Statistics, in the first three quarters, Yulin’s industrial value-added growth rate reached 8.3%, and the energy industry drove 7.8%. The revenue of the industries above designated size in Yulin reached 406.4 billion yuan, with a total profit of 126.8 billion yuan, a year-on-year increase of 144%.
In the first three quarters, Yulin’s nominal GDP growth rate reached a staggering 27.6%, ranking second in the country, twice the growth rate of the first-tier cities of Beijing and Shanghai.
The energy industry in Yulin has created a group of high-income people. As early as ten years ago, they began to be keen to invest in the property market. They not only got together to buy houses in the provincial capital of Xi’an, but also bought and bought houses in Yulin. However, until now, Yulin has not implemented the property market purchase restriction policy. Facing the voice of the masses, in April this year, the Yulin Municipal Housing and Urban-rural Development Bureau stated that it will not introduce a purchase restriction policy in the real estate market for the time being. The Yulin Housing and Urban-Rural Development Bureau will in the future real estate market regulation and control policy formulation process, in accordance with the actual situation in Yulin City. Make relevant suggestions to the municipal party committee and government.
Per capita purchasing power is still weak
Although the per capita GDP is high, the disposable income of urban and rural residents in Yulin is average. In 2020, this figure is 25,800 yuan, which is far lower than Xi’an’s 35,800 yuan. There is also a big gap between the rich and the poor in Yulin. The per capita disposable income of urban residents is 35,700 yuan, while the disposable income of rural residents is only 14,300 yuan.
“Our average monthly salary is not high, at more than 5,000 yuan.” A Yulin citizen said that the mining industry and other energy-related industries have higher income growth rates, while other industries have average growth rates. Perhaps because of the large income gap, some people in Yulin have been rushing for houses, while others continue to report that housing prices are too high.
In contrast to the skyrocketing housing prices, on the one hand, the energy-rich Yulin “local tyrants” have the enthusiasm to buy and buy, and on the other hand, branded real estate companies lack interest in deepening Yulin.
Branded real estate companies prefer Xi’an, the provincial capital. In addition, cities such as Baoji, Hanzhong and Yan’an have also attracted more real estate companies to invest. This situation really does not match Yulin’s second place in the province’s economic aggregate.
Currently, most of the projects in the Yulin real estate market are developed by local real estate companies in Shaanxi. The only foreign brand real estate companies that have entered the Yulin market are Wanda, Greenland, Zhongliang,Sunshine City, Zhongnan, etc. Currently, only Sunshine City and Zhongnan are currently on sale, and there are very few projects.
A person engaged in real estate investment told CBN that Yulin is not suitable for real estate companies to cultivate deeply, and there are not many foreign real estate companies that can survive locally. The main reason is that the market is fragmented and the energy-based cities The real estate market is too turbulent. Because of its single industrial structure, following the energy cycle, real estate will also “ups and downs.”OrdosThis has happened in the history of China.
The Crane Research Center believes that although Shaanxi’s real estate market has grown rapidly in recent years, in fact, the overall per capita purchasing power of Shaanxi is relatively weak, and the average price of commercial housing sales is relatively high, which has affected the development of real estate enterprises. In 2020, the per capita GDP of Shaanxi Province is 66,292 yuan, ranking 12th in the country, and the per capita disposable income of urban residents is 37,868 yuan, ranking 17th, both of which are lower than the national average. In 2020, the average sales price of commercial housing in Shaanxi was 9,828 yuan per square meter, ranking 9th among all provinces and cities in the country, and first among neighboring provinces and cities.
With the downturn of the national property market, the crazy Yulin property market finally showed a little cooling signal. According to China House Price Quotes.com, in the most recent month (October 4th to November 4th) second-hand housing in Yulin was listed at RMB 10,059/sq.m. Yu Ping.
(At the request of the interviewee, Zhao Rui is a pseudonym)
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