Young homebuyers take refuge in rust belt towns | Malay Mail

HEGANG, July 20 — Fontana Fang has dived into China’s cutthroat real estate market and emerged victorious, defying skyrocketing prices to snap up a prime property for next to nothing — a distant dream for many.

But there’s a catch: His new apartment is in a coal town near the Russian border where winter temperatures plunge below zero, nearly 4,000 kilometers (2,500 miles) from his glitzy city.

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Fang, 29, is part of a wave of young Chinese who are choosing to invest in cheap real estate in declining and remote industrial regions, ditching China’s modern, expensive metropolises.

In major cities, “unless you are a child of the super-elite, I don’t see how young people can earn enough for a house”, the brand management professional told AFP.

Fang’s main residence is in southern Guangzhou, where he lives with his wife and two children, but the apartment belongs to the couple’s parents.

Flats there regularly sell for more than 100,000 yuan (RM62,900) per square meter, beyond the means of many middle-class residents, he said.

But last winter, a road trip brought Fang to Hegang, a hardscrabble mining settlement in China’s frigid northeast.

There, the entire property is sold for a fraction of the going rate down south.

Fang and his wife paid just 40,000 yuan (US$43,000) on the spot for an entire top-floor apartment with a balcony and panoramic views of the hills.

They plan to renovate it to become a retreat from Guangzhou’s scorching summer.

“I was surprised. I didn’t expect to be able to get a house for so little money, even if you built it yourself,” Fang said.

Shrinking cities

China’s hinterland is scattered with hundreds of industrial cities past their prime.

Towns like Hegang have endured decades of population loss since the 1980s, as market reforms shifted the center of economic gravity to the increasingly affluent east and south coasts.

Hegang shed more than 15 percent of its population between 2010 and 2020, according to official figures.

But now these shrinking cities are seeing increased interest from young buyers looking for alternatives to the urban rat race, drawn by easily affordable housing and a growing reputation for cheap, carefree living.

A young homeowner who bought a 68,000-yuan flat in Gejiu — a fading mining city in southern Yunnan province — told AFP they did so “mainly to ‘lie'”.

The phrase refers to a burgeoning dropout culture that pushes against China’s intense and often burnout-inducing study and work pressure.

The country’s Communist Party leadership criticized “lying flat” as rejecting the values ​​of hard work and innovation, and encouraged young people to work hard for the good of the country.

The homeowner, who asked not to be identified, said they “didn’t even think about working” since moving to Gejiu.

“I will stay here, live on the little money I have, and look for temporary work in a big city when I run out,” they said.

Prospects are dimming

During an AFP visit to Hegang this month, roadside vendors sold fresh fruit, vegetables and snacks for the equivalent of a few US cents each.

Bathed in gentle sunlight, clusters of retirees played cards outside on their porches.

“There’s something spiritual about (Hegang’s) slower pace,” said newly minted homeowner Kathy Cao, 28.

“In (richer) cities… you can only talk about work or business all day,” said Cao, who used to live in the cities of Xi’an and Zhengzhou.

“But people here don’t do that much, because your chances of making a lot of money are still pretty small.”

A once prosperous town, Hegang has recently struggled to pay mounting municipal debts, and the government entered an unprecedented financial “restructuring” in 2021.

The move helped avert a catastrophic bankruptcy, but money remains tight, and cheap housing alone is unlikely to reverse Hegang’s fortunes.

The city often does not pay wages to public sector workers on time, a local administrator told AFP.

Shen Wenxin, a Hegang native who recently returned to open a cafe, said: “The more people come here, the better.”

“But they only account for a small part of the economy.”

“Our low house prices are all well and good, but what should our core economy depend on?”

Other locals contacted by AFP said they were skeptical about the city’s ability to revive itself.

Max Chu moved to Beijing for university and now works there — with no plans to return.

“After a while, this trend won’t be very popular,” he predicted.

“People’s memories of it will fade.” — AFP

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