Xuzhou, which has a long history of more than 4000 years and is one of the “nine Chinese states”, was once an “important town in the northwest” with low-key development in Jiangsu Province. In recent years, it has been pushed to the forefront of the wind and waves for some topics.
After the covid-19 epidemic, the national real estate market was once relatively weak, but Xuzhou attracted attention because of the rapid rebound of house prices and leading the rise of the whole country. However, in the past 2021, Xuzhou’s real estate market witnessed what is the “double heaven of ice and fire”. In the first half of the year, “how fierce is the rise” and “how miserable is the fall” in the second half of the year.
When the GDP has reached 800 billion, this transportation hub city with special geographical location and the name of “central city of Huaihai Economic Zone” has reached a new stage of development and must rethink its own road of economic development.
2017 is the watershed of house prices
Speaking of the real estate market in Xuzhou, Zhang Chu, a senior real estate marketer who has worked in Xuzhou for more than 10 years, believes that 2017 is a watershed. That year, the State Council approved Xuzhou as the “central city of Huaihai Economic Zone”.
“Before 2016, Xuzhou was in the downturn of real estate for a long time. Since 2017, the concept of” central city of Huaihai Economic Zone “has been put forward, Xuzhou has begun to open up and develop, and house prices have taken off.” Zhang Chu said.
When it comes to Huaihai Economic Zone, we have to first understand the extremely special geographical location of Xuzhou.
As it belongs to “Jiangsu, Zhejiang and Shanghai” and is located north of the Qinling Huaihe river boundary, Xuzhou is the only city in China that has both heating and mail.
It is completely different from the traditional impression of Wunong’s soft language and gentle water town in Jiangsu Province. Xuzhou, located in the northwest of Jiangsu Province, is a real northern city geographically. In terms of transportation, Xuzhou has been a fortress connecting the north and the south of China since ancient times. Therefore, the folk customs of Xuzhou have the characteristics of both north and south.
The dialects in Jiangsu Province are mainly divided into two factions: Wu dialect is spoken in Suzhou, Wuxi and Changzhou, and Jianghuai Mandarin is spoken in Nanjing, Zhenjiang and most cities in Northern Jiangsu. Only Xuzhou and Jiangsu Lianyungang Port Co.Ltd(601008) Ganyu speak Central Plains Mandarin, and they like to use words such as “I” and “Zhong” in daily life. Geographically, Xuzhou is also quite close to Shandong and Henan. More than 200 kilometers north is the Jilu Mandarin area, and more than 200 kilometers west is the Central Plains Mandarin area. In terms of diet, unlike Jiangnan cuisine and Huaiyang cuisine, Xuzhou cuisine is salty and spicy, and the taste is closer to the north.
Because of its inextricable relationship with Shandong, Xuzhou is often ridiculed as an “important town of Shandong”.
But in fact, the development of Xuzhou since ancient times is inseparable from the whole Jiangsu. It is an important transportation hub connecting the north and the south. In ancient times, the Beijing Hangzhou Grand Canal ran through the whole territory. When the provincial system was implemented in the early Qing Dynasty, Xuzhou was included in Jiangnan province. After dividing Jiangnan province into Jiangsu and Anhui during the reign of Emperor Kangxi of the Qing Dynasty, Xuzhou continued to be included in the name of Jiangsu.
Due to its special geographical location, Xuzhou is also a place for strategists. From Liu Bang and Xiang Yu in the late Qin Dynasty and the early Han Dynasty to Chen Yi and Su Yu in modern times, they have maneuvered in Xuzhou. After the battle of Huaihai in 1948, Xuzhou was temporarily included in Shandong and returned to Jiangsu only three years later.
After the founding of new China, Xuzhou was still a traffic fortress, with the intersection of Beijing Shanghai railway and Longhai railway. It was in the forefront of population and economy in Jiangsu Province. Before the reform and opening up in 1978, Xuzhou’s GDP was second only to Nanjing, Suzhou, Wuxi and Nantong. “Until the 1990s, when other cities in Northern Jiangsu wanted to go to Beijing or other northern cities, they had to transfer to Xuzhou first.” Zhang Chu said.
However, with the deepening of reform and opening up, over the past 20 years, other cities in Jiangsu Province have gradually embraced the thighs of Shanghai or Nanjing. Xuzhou, located in the northwest, seems to be unable to catch up with any circle in Jiangsu.
Therefore, Xuzhou wants to make use of its geographical advantage of connecting the four provinces, strengthen the “Huaihai Economic Zone”, attract the “poor brothers” of the four provinces, and become the core city of this economic zone.
In 2017, the Jiangsu delegation of the National People’s Congress jointly put forward a proposal calling for the implementation of the planning of the Huaihai Economic Zone at the national level as soon as possible, so as to make the development of the region a national strategy. In the same year, the State Council approved Xuzhou as the “central city of Huaihai Economic Zone”. In 2018, the national development and Reform Commission released the Huaihe River ecological economic belt development plan, which pointed out the exact scope of the Huaihai Economic Zone, including Xuzhou, Jiangsu Lianyungang Port Co.Ltd(601008) and Suqian in Jiangsu, Suzhou and Huaibei in Anhui, Shangqiu in Henan, Zaozhuang, Jining, Linyi, Heze and other cities in Shandong, and proposed to improve the radiation driving capacity of Xuzhou regional central cities.
As a central city, Xuzhou has opened and operated three subway lines in recent three years. In terms of high-speed railway construction, Xuzhou also connects north and South and connects East and West. In recent years, Zheng Xu high-speed railway, Xu Su Huai salt railway and Lian Xu high-speed railway have been completed successively. Xuzhou continues to play an important transportation hub city.
Xuzhou, which has become the central city of the “Huaihai Economic Zone”, has also embarked on the concept of regional center in its real estate market. Most buildings have played relevant billboards in the hope of generating adsorption capacity to surrounding cities.
after the outbreak, the property market took the lead in rebounding
After 2017, to what extent will house prices take off in Xuzhou?
The central economic work conference at the end of 2016 first proposed “no speculation in housing”. Since then, local control measures have been tightened, and house prices in most cities have risen and fallen. However, Xuzhou has walked out of a curve of continuous rise. After the outbreak of the epidemic in 2020, the overall real estate market is weak, and the rise in Xuzhou has become particularly prominent, Become a representative city of house price rebound.
In September 2020, among the 70 large and medium-sized cities where the National Bureau of statistics monitored the changes of house prices, Xuzhou ranked first in the country. By February 2021, the month on month increase is still the first in China.
By the first half of 2021, house prices in Xuzhou had risen for five consecutive years, with the rise of new houses and second-hand houses leading the country.
Zhang Chu told reporters that the new houses in Xuzhou have increased by about 80% in the past five years. By the high level in the second half of 2020, the average price of new buildings in the urban area will exceed 20000 yuan / m2, and there are more and more “30000 +” buildings in the new buildings entering the market. At that time, Xuzhou also poured in many foreign speculators. Some came for the prospect of “central city of Huaihai Economic Zone”, while others thought that many other cities fell, while northern Jiangsu cities represented by Xuzhou only rose but did not fall, so they simply gambled.
Wu Peng, a native of Xuzhou, recalled that before 2016, house prices in Xuzhou had been low, and new buildings were not easy to sell. The price of new houses within the second ring road of the city center was 4000-6000 yuan / m2, and the better buildings were about 10000 yuan / m2. By 2020, the average price of new houses has reached 12000 yuan / m2, and the top buildings are more than 30000 yuan / m2.
As an old real estate marketer, Zhang Chu smelled the danger when the market was still hot in the second half of 2020. “There is a bubble in the whole market. Many factors have stimulated the rapid rise of prices, and buying high priced disks is risky.”
In addition to the eye-catching concept of “central city of Huaihai Economic Zone”, there are multiple stimuli from the land market, shed reform and real estate hot money.
From 2020 to 2021, Xuzhou “land kings” appeared frequently, constantly refreshing the historical record of the land market. In August 2020, after 147 rounds of bidding, Nanjing Yiju Real Estate won the plot of East China Machinery Factory in the center of Xuzhou, and the floor price reached 16900 yuan / m2. In that year, there were more than 10 plots with a floor price of more than 10000 yuan in Xuzhou.
In April 2021, Midea real estate won the plot of Xuzhou Donghu New Town with 3.55 billion yuan, setting a record of Xuzhou total price Diwang, with a floor price of 9366 yuan / m2. In contrast, in 2018, Shimei real estate also acquired land in the East Lake New Town area, and the floor price was only 2125 yuan / m2. In just three years, the land price in the same region soared by 340%, which shows that the land market in Xuzhou increased more violently than the real estate market.
The fierce competition in the land market stems from the appreciation of real estate enterprises for the strong third tier cities at that time. Xuzhou is the representative of the “strong third tier cities”, which is suitable for real estate enterprises to adopt the “fast turnover” method. From 2017 to 2020, most private real estate enterprises preferred this kind of market and thought it was more rewarding than investing in the first and second tier cities. Meidi real estate, a real estate enterprise in Guangdong, is one of the first foreign real estate enterprises to layout Xuzhou. It has taken land in Xuzhou since 2010. Since 2017, those “real estate dark horses” have begun to enter Xuzhou, such as Zhongliang, a Zhejiang real estate enterprise, Zhongjun, a Fujian real estate enterprise, and so on. In 2018, Jinmao, a central enterprise, also entered Xuzhou and won three projects in one breath that year. Jinmao products built in Xuzhou became the price ceiling of Xuzhou.
In addition to the stimulation from the land market, the monetized resettlement of shed reform has also played an important role in the rise of house prices in Xuzhou. In 2015, Xuzhou’s housing decontamination cycle exceeded 21 months. In order to reduce inventory, Xuzhou encouraged relocated residents to choose cash compensation and gave 10% reward. In 2018, the clearing cycle of the real estate market has been reduced to about 4 months. In 2017, Xuzhou’s shed reform plan was only 19117 households with an area of 2.69 million square meters, which was significantly expanded to 21.27 million square meters in 2018. The shed reform target was 16.8 million square meters in 2019 and 12.76 million square meters in 2020.
From 2018 to 2020, the goal of Xuzhou shed reform has been more than 10 million square meters for three consecutive years. Whether it is monetary resettlement or later physical resettlement, it has objectively squeezed a large number of buyers to the real estate market, and the time is also in line with the era of great development of Xuzhou real estate market.
However, in Xuzhou, where house prices have skyrocketed, infrastructure construction has been the main driving force of economic growth in recent years. Projects such as viaduct, subway and old city reconstruction have been launched in turn. The transformation and growth of emerging economies are weak and have little attraction to high-end population employment. “After all, Xuzhou’s per capita income is low and its economy is not as good as that of Southern Jiangsu, so I think when the house price in Xuzhou reached a high level, it has entered a bottleneck period.” Zhang Chu said.
the housing in the school district has dropped by 9000 yuan / m2
In the second half of 2021, Xuzhou has become one of the cities with the highest price reduction in the new market.
According to Kerui statistics, in the second half of last year, the prices of some real estate projects and sectors in Xuzhou fell again and again, “there is no minimum, only lower”.
For example, the “Hanwang Tingquan town” project in Xuzhou reduced prices by 5% in July and September last year, and even more after October. By the end of the year, the original price had been reduced from 12900 yuan / m2 to 7740 yuan / m2, with an overall decrease of 40%. Shanhe Longyin project decreased from 16675 yuan / m2 to 12500 yuan / m2, a decrease of up to 25%.
In terms of sector, taking the Damiao sector of Xuzhou Economic Development Zone as an example, several projects decreased by 6% – 9% in half a year.
According to the latest data released by the National Bureau of statistics, as of December 2021, the price of new commercial housing in Xuzhou has fallen for four consecutive months and that of second-hand housing for six consecutive months.
According to the statistics of Lianjia and anjuke websites, as of late January this year, the number of second-hand houses listed for sale exceeded 30000. Since the second half of last year, this number has increased month by month, but the trading volume of second-hand houses in Xuzhou is declining, and many owners are selling at a lower price.
Wu Peng told reporters that since the second half of last year, intermediaries in the circle of friends have often sent information about “urgent sale” and “sell-off” of real estate. “Once I talked to an intermediary about a house with a starting price of more than 1.5 million, which is located at the core. Later, I talked about 1.25 million, and the landlord was willing to sell it.”
Xuzhou many once hot school district housing communities, the current decline in transaction prices is also very obvious. For example, the second-hand house of talent home in the new urban area sold a set of houses with an area of more than 80 square meters on December 25 last year, with a unit price of only 18855 yuan / square meter. Compared with the transaction unit price of 27778 yuan / square meter in March 2021, it has decreased by nearly 9000 yuan / square meter in less than nine months.
Zhang Chu believes that those speculators who bought high-priced houses in 2020 must be locked up now. “I have always believed that once the property market is too hot, it will inevitably attract regulatory attention, and the regulation of the property market will follow. Xuzhou’s own economic development can not support high house prices. From the second half of 2020, new projects may not be sold out and face certain pressure. Therefore, whether buying houses or land, we should act according to demand and our ability.”
In 2021, Xuzhou’s GDP made a new breakthrough in history, crossed the 800 billion mark, and ranked sixth in Jiangsu Province, with a year-on-year growth of 8.7%. It is hopeful to sprint to the trillion club. At present, there are only 24 cities with GDP exceeding trillion in China. Now, with the end of large infrastructure construction and shed reform, the route of stimulating the economy with real estate in the past may no longer work. As a key city one belt, one road and a new international energy base, Xuzhou, with a history of over 4000 years, needs to explore new ways to develop its economy under the premise of stable housing prices.
