Summary of the Key Points
This article focuses on the hot topic of houses in Baoji selling for 8,000 yuan per unit. It first clarifies that the low-priced housing in Baoji is a special case involving old, dilapidated buildings located on top of buildings (the “top floor”), and does not represent an overall “Hegangization” phenomenon. The article then analyzes the real challenges faced by Baoji, such as its declining economy and decreasing population. It points out that there are already 24 “new Hegangs” across the country, with the “Hegangization” trend spreading from resource-exhausted cities to more third- and fourth-tier cities, as well as some areas within central cities. Finally, it reveals that this is due to a shift in the urbanization process (from rapid expansion to quality improvement of existing infrastructure) and a contraction in population and industry. In the future, “Hegangization” will become the norm, making it increasingly important to choose the right city for investment or residence.
I. Are Houses in Baoji Selling for 8,000 Yuan per Unit a Common Phenomenon?
The answer is no! The house priced at 8,000 yuan is located in the residential building of the former Shaanxi Machine Tool Factory in Chencang District, built in the late 1980s (almost 40 years old), and it’s on the top floor, which usually leads to water leaks and difficulty in accessing. Other properties in the same community are generally priced at 40,000 to 50,000 yuan per unit, so not all houses are that cheap.
Baoji is different from Hegang: Hegang is a resource-exhausted city (with its coal reserves depleted and its population declining), while Baoji is the second-largest city in Shaanxi (after Xi’an) and an important industrial hub in the west, known as the “Titanium Valley of China” with a key railway junction (the Longhai and Baocheng lines). Therefore, comparing Baoji directly to Hegang is somewhat exaggerated.
II. Why Are There Low-Price Houses in Baoji?
The problems in Baoji are a lack of economic growth and a decreasing population:
- Economic Decline: Baoji used to be the second-largest GDP contributor in Shaanxi but has now been overtaken by Xianyang and Yulin, falling to fourth place.
- Population Loss: The permanent population decreased by nearly 400,000 according to the seventh national census, and it is expected to decrease further by another 40,000 by 2025.
Coupled with the overall downturn in the real estate market nationwide, old, dilapidated buildings (without elevators and in poor conditions) are less desirable. With a supply exceeding demand, some houses are sold at very low prices.
III. The Spread of “Hegangization” Across the Country
In recent years, cities such as Rushan in Shandong, Changshou in Chongqing, Qianjiang in Hubei, Huainan in Anhui, and Hebi in Henan have been labeled as “second Hegangs.” In 2024, media reports indicated that there are already 24 “new Hegangs” nationwide, with the list including 95 cities—these are not only resource-exhausted cities but also some areas surrounding major cities like Beijing, Shanghai, and Guangzhou. As real estate adjustments deepen, more such low-priced houses will appear, especially in old, dilapidated buildings in central cities. Previously, these properties were expected to appreciate through demolition; now, urban renewal focuses on renovation rather than demolition, eliminating the potential for price increases, leading to even lower prices (some people even buy multiple units).
IV. The Essence of “Hegangization”
The low housing prices are just a symptom; the real issue is sustainability in urban development:
- Increasing Number of Contraction Cities: According to Zhengzhou University, 139 cities are experiencing population decline. Nanjing University found that more than 180 prefecture-level cities are contracting in terms of population, economy, or space.
- Change in the Urbanization Process: The central government has shifted from rapid new housing construction to the renovation of existing buildings. Third- and fourth-tier cities no longer have the same momentum for expansion, and with a loss of population and industry, housing prices cannot remain stable.
V. Future Trends: “Hegangization” Will Become the Norm
In the future, houses selling for 8,000 yuan per unit will no longer be news; it will become a common occurrence:
- Market Diversification: Houses in good cities (with population inflow and strong industries) will remain valuable, while those in poor cities (with population outflow and weak industries) will become cheaper.
- Urban Lifecycles: Just as people age, cities also go through stages of growth and decline; this is a natural process. For individuals, buying or settling in cities should be more cautious. Prioritize areas with population inflow and industrial support, avoiding those with continuous population loss and economic decline, as otherwise, the property may become worthless.
In summary, Baoji is not the next Hegang, but “Hegangization” is becoming a localized phenomenon across the country, reflecting broader urban development trends. Understanding these trends is crucial to avoid making mistakes in real estate investments.