China’s current property dilemma continues to worsen with no end in sight. Home prices continued to slide despite the traditional peak consumption season in October being upon us.
According to a Kanzhongguo report on October 28, some cities in China have recently started promoting a new phenomenon called “cabbage priced” houses where homebuyers can own a house for a very cheap price.
Home prices are even lower than the decorating costs and prompt Chinese households to flee from other big cities and live there. Fuxin city in Liaoning province is one of them.
The article, citing Chinese media outlets, reported that a woman by the name of Ouyang flew from Changsha, the largest city in Hunan province to purchase a small house in Fuxin for only about $2,300 (17,000 yuan).
This is way cheaper than that of the yearly costs to decorate and furnish, which is normally around $8,300 to $9,700 (60,000 yuan to 70,000 yuan).
Ouyang said that she decided to buy the house to enjoy the great price and the convenient transportation.
A local real estate broker by the name of Xiaomin, claimed that every house in Fuxin has three or four rooms and can be sold very quickly. Within only three months, from last November to January this year, 158 houses were sold.
Among the customers, 95% come from other places, with young people making up more than 80%.
Another broker named Li said that each house in Fuxin has an area of about 645 square feet (60 square meters) and costs nearly $2,800. The average price ranges from as low as $4 to 5$ per square foot.
Kanzhongguo noted that Chinese netizens believe more houses sold does not necessarily mean higher demand. With so many agents trying to sell homes and the cheaper prices, commissions would not be as good as those in the big cities.
Young homebuyers are also concerned about the high risk of not being able to find jobs after buying one of the cheaper houses.
Therefore, many houses are empty and the owners decide to sell instead of just renting out at low prices.
Li also wants to remind homebuyers looking to buy a home in Fuxin to consider carefully before paying low home prices. Do not equate cheaper house prices to a low cost of living.