Why did Ordos Real Estate Market, once known as ghost city because of its small population, revive?

 Why did Ordos Real Estate Market, once known as ghost city because of its small population, revive?

In Peking University and Tsinghua, students from Ordos do not worry about finding their hometown.

Recently, the first financial journalist asked a taxi driver in Kangbashi New District, Ordos City, Inner Mongolia Autonomous Region why Kangbashis housing prices have remained basically stable in the ups and downs of Ordoshousing prices. He said: You should go to Erdos No. 1 to have a look. In this years College Entrance Examination of No. 1 Middle School in Ordos, 32 students were admitted to Peking University and Tsinghua University, and 5 students were admitted to famous universities in Hong Kong.

Ordos No. 1 Middle School is located on a main street. (Source: Official website of No. 1 Middle School of Ordos)

Ordos No. 1 Middle School is located on Ordos Street in Kangbashi New District.

Its hard to imagine that this is a city that started construction 15 years ago. It was once described as ghost city because of its idle property and small population. Kangbashi is becoming more and more energetic and popular nowadays. In fact, it is clean air, high-end education resources and medical resources that support the housing prices in Kangbashi District. This also means the transformation of Ordos, a coal city.

Not recommended to invest in real estate

Compared with the past few years in Kangbashi, the number of cars on the streets has increased significantly. At that time, reporters in Kangbashi saw that within the scope of vision, several traffic lights did not have a car. Now, theres a queue at the traffic lights. Pedestrians crossing the road also need to look around.

Reporters came to a sales office on the west side of Genghis Khan Square. There was only one staff member on the phone in the sales hall. It was raining outside and the hall was dark without lights on. She thought the reporter was coming to see the disc and said that the buildings here had been sold out. Are you here to get the land? Now the land is not easy to take.

Now at a high point, said the sales lady, there is no need to buy a house in Kangbashi for the purpose of investment.

If you buy a house for the purpose of investment, you are advised not to come again. The purpose of investment is to gain, and to enter and exit from the low point. Now Kangbashis housing prices are at a high point and no longer have investment value. She said, Even if you have free money, its not recommended that you put it here. House prices are likely to rise, but the increase should be modest.

In conversation with the staff member, the reporter learned that the residential population of Kangbashi District is polarized. One is that there are more young people and the other is that there are more old people. Old people are interested in the environment here.

When the reporter asked if there were many civil servants who came to Kangbashi to buy a house, because the Ordos municipal government had moved to Kangbashi from Dongsheng District long ago, the staff member heard that there were many parks. She said: Kangbashi itself is a garden city, not to mention that there are many parks.

Some of the children in the surrounding areas now go to junior high school or even primary school and come to Kangbashi to buy a house in order to have a chance to go to a good high school in the future. If its investment, its investment.

Another local people told reporters that Kangbashis medical conditions are very strong, even patients in Baotou City choose Kangbashi to treat. This also shows that the construction of Kangbashi started at a high level at that time.

Local officials in Ordos do not deny the advanced planning of urban construction.

A corner of Genghis Khan Square in Kangbashi.

It is precisely because of the influence of comprehensive factors, people around Kangbashi also come here to buy houses. Compared with the lowest price around 2016, the average house price in Kangbashi has increased by 2,300 yuan per square meter. The workers second-hand house sold between 80 and 100,000 yuan, about 6,000 yuan at that time.

The experience of this interview is that Kangbashi, once known as the ghost city, is reviving and gradually increasing its vitality.

Someone succeeded in copying the bottom

As far as Ordos is concerned, house prices have gone through a process of soaring, falling and rising, which is more obvious in Dongsheng District.

Dongsheng Districts Citizen Center is located in the center of the district. The reporter met a citizen who was running in the morning here. She told the first financial reporter that in 2016, she bought a house nearby. The price at that time was 3500 yuan per square meter, and now it can be sold to 6000 yuan. She felt she was buying at a low point.

She believes that around 2016, Dongsheng Districts housing prices reached a low point, then began to rise, and now they have risen to around 2010 levels.

At that time, the soaring house price was due to the coal economy. Since 2006, supported by the funds brought by the coal industry, the real estate industry in Erdos began to break out. The house price soared from 1500 yuan per square meter to 5000-6000 yuan in a year or two. Tens of thousands of buildings were not uncommon. It was a common phenomenon at that time that one room was hard to find. 2010 is the most prosperous year of the Ordos real estate market.

But then there was a cliff-like decline in house prices in Ordos. One person in Ordos has an analysis of the reasons for this: there were a lot of news reports about the investment value of houses in Ordos, which attracted many people, including neighboring provinces, to visit. Afterwards, I felt that the environment was good, so I chose to come here to buy a house. When more and more people buy houses, the real estate merchants gradually raise prices. The higher the prices, the more anxious the people waiting to buy houses are, the more they buy, the more they buy such a situation. But because of the rapid expansion of Ordos, the housing supply has increased a lot at a time, so house prices have fallen sharply. Its like a restaurant. If you look at a lot of people, youll go in for dinner. If you dont have anybody, youll suspect the restaurant is in trouble.

In April 2014, the empty building in Dongsheng District of Ordos. Photography/Wang Xiaodong

De-inventory of Real Estate and the Transformation of Ordos

In March 2016, the city of Ordos issued the Opinions on the Implementation of the Steady and Healthy Development of the Real Estate Market, one of the important aspects of which is inventory removal.

Strict land supply management for real estate development is listed as Article 1. Opinions said: the establishment of real estate de-inventory and real estate development and construction land linked system, real estate de-inventory unfinished banner areas, strict control of real estate development and construction land supply, within the central urban area within the economic development zones (parks) no longer supplier goods housing land. This should be the reason why the above-mentioned staff said it was not easy to get land.

In 2016 and 2017, the total area of commercial housing digested by the greenhouse reform in Ordos was 5.898 million square meters and 5.11 million square meters, respectively, while the total area of commercial housing digested in 2014 and 2015 was only 5.88 million square meters, less than that in 2016. Data from the report on the work of the government of Ordos show that.

Up to now, Ordos has digested 16.35 million square meters of real estate inventory, and the real estate market is stable in volume and price. Recently, at a special press conference held in Erdos City to celebrate the 70th anniversary of the founding of the Peoples Republic of China in Inner Mongolia Autonomous Region, the relevant leaders of Erdos said so.

An important reason for the rise in house prices is the decrease in supply. According to the annual social and economic development bulletin issued by Ordos City, in 2009, the completed area of the citys houses was 39.66 million square meters, and in 2017, the completed area of the houses was 449,000 square meters.

Reporters noted that although house prices in Ordos have rebounded, the deep-seated contradictions remain unsolved. Take the real estate construction area as an example, according to the above-mentioned bulletin, in 2010, the real estate development and construction area of the city was 4,122.4 million square meters, and in the following years, the total completed area did not exceed 13 million square meters. There is a gap of nearly 30 million square meters.

Even in the vicinity of Dongsheng District Citizen Center, reporters have seen many rotten development projects. Out of Erdos Ijinholuo Airport is a development zone, where the road is named after longitude and latitude. Reporters see that up to 18 latitudes, and many of these buildings do not see signs of construction. Im afraid this stock is harder to digest.

According to this years government work report of Ordos, resolving government debts, preventing financial risks and serving the real economy are the important directions of our work. In 2018, the total amount of chemical debt was 47.1 billion yuan, and 117% of the annual debt was completed.

Continuing to change the situation of one coal dominates the whole country is also an important direction for the development of Ordos. Around 2010, the coal industry in Ordos accounted for 75% of GDP. After gradual transformation in recent years, the added value of non-coal industry in Ordos accounted for 50% of the industrial added value above the scale. In 2018, the investment of non-coal industry accounted for 77.1% of the total industrial investment. Meanwhile, in recent years, Ordos has withdrawn from coal production capacity of 13.35 million tons.

Employees of the Ordos Coal and Oil Branch of the State Energy Group inspect the byproduct asphalt produced by direct coal liquefaction. Chinas first demonstration project of direct oil production from millions of tons of coal has been completed here. Information Map of Xinhua News Agency

Coal economy is still an important economic pillar of Ordos. Last year, coal production and sales in Ordos reached 616 million tons and 664 million tons respectively. However, the task facing Ordos coal industry is to transform and upgrade. For this reason, Erdos has hired authoritative research institutes of the state to scientifically compile research reports on high-quality economic development, modern energy economy demonstration zone planning and general planning of modern coal chemical industry demonstration zone. It has laid out the layout of coal deep processing. This year, it has started five new clean coal and electricity projects to build Jiutai methanol to olefin and new coal chemical industry demonstration zone. It can stabilize a number of coal deep-processing projects such as light hydrocarbons, add 820,000 kilowatts of power installed, 2.19 million tons of chemical production capacity, and increase the in-situ coal conversion rate to 22%.

Chart: Contrast of construction area and completed area of real estate in Erdos in recent years

Source: First Financial Responsible Editor: Zhou Xinyi_NB12002