"Everyone has a concern that mid- to high-end properties are at high prices."

Text/ Ba Jiuling

There were no surprises in the national land auction market.

For example, in the first half of the year, the national land transaction area was about 990 million square meters, a year-on-year decrease of 29%, and the transaction amount was about 1.1 trillion yuan, a year-on-year decrease of 35%; the transaction area of ​​residential land was about 180 million square meters, a year-on-year decrease of 35%; the transaction amount was about 669.4 billion yuan, a year-on-year decrease of 42%.

In this receding situation, there seems to be one county-level city that is an exception: Yiwu.

In the first half of the year, Yiwu's land transfer fees reached 6.35 billion yuan, of which residential land transfer transactions amounted to 4.62 billion yuan, a year-on-year increase of 9%. This 4.62 billion yuan residential land transaction amount is close to Shenzhen's residential land transaction amount of 5.18 billion yuan in the first half of the year.

In response, in the first half of the year, Yiwu held a lottery for many new luxury housing projects, which were very popular and achieved transaction volume of over 6.2 billion yuan.There is a property project called "Fengqi Chaoming" developed by a well-known real estate developer, which sold 3.5 billion yuan in 43 days.

Another property project built by a Yiwu real estate developer, called "Wanjing Guanyun", has 78 townhouses with a price of 65,000 yuan per square meter. The price of a single unit ranges from more than 10 million yuan to more than 30 million yuan. It was sold out in 18 seconds after it was launched.

Why? Recently, Xiaoba went to Yiwu to find out.

Behind the hot land auctions and luxury housing sales: a scarce high-end market in the urban area emerges

Many people tend to directly link the alternating hotness of Yiwu's land auctions and luxury housing market in the first half of the year with Yiwu's foreign trade situation.

In the first half of this year, Yiwu's exports amounted to 288.03 billion yuan, up 21.4% year-on-year. The Paris Olympics dividend was significant. Yiwu's exports to France amounted to 1.73 billion yuan, up 23.7% year-on-year, of which the export of sports goods increased by 150.7% year-on-year. Most of the "Friger" dolls, the mascot of the Paris Olympics, were produced in Yiwu.

Is it that simple?To understand the phenomenon of Yiwu's land auction market, we must start from the luxury housing market.

One of the highlights of the trip was one of the hottest luxury housing estates, "Fengqi Chaoming". The developer of "Fengqi Chaoming" is Greentown, and the products are courtyard houses and large flats. The estate is located in the old trade center of Yiwu, Nanfanglian, 6 kilometers away from the current trade center of Yiwu, the International Trade City, and is a quasi-urban area with mature education, business, entertainment and leisure facilities.

Photo source: Photo taken by Xiaoba

During the visit, we found that this is not a completely open property. The two lanes leading to the sales office are completely blocked by barriers, and it is not completely free to enter and exit;Generally, you need to make an appointment 2 hours in advance to visit the model house of the courtyard, and the visitor needs to be approved by the leader, which is somewhat difficult.

According to the staff, these measures are aimed at minimizing visits from peers and irrelevant people.

In front of the brightly decorated sales office and exquisite sand table, Xiaoba also learned that there is only one side unit left in the courtyard. Because it is close to the power distribution room, it blocks some of the view and light, so it is discounted by 1.3 million yuan and the selling price is more than 19 million yuan. The large flats that will be drawn by lottery are buildings 6, 7, and 10. Public facilities include four underground and high-rise swimming pools, leisure clubs, shared restaurants, tea rooms, chess and card rooms, etc.

Sales office sand table source: Xiaoba photo

It is important to emphasize the two characteristics of "Phoenix Rising and Tide Ming":Located in an urban area with mature surrounding facilities and with a strong focus on confidentiality. This is the result of the iterative upgrade of new housing projects in Yiwu and the fierce competition in the luxury housing market.

It is understood that before 2020, there were almost no low-density luxury houses in Yiwu city.

Several senior Yiwu real estate agents summarized to Xiaoba: There were few new houses in Yiwu before 2016. In 2016, after Yiwu started a new round of large-scale shantytown renovation, from 2016 to 2019, the market for new houses that meet rigid demand was hot.

But after 2021, most of the old houses have been demolished, and the market for commercial housing for basic needs has become saturated, so that many developers of commercial housing for basic needs are "trapped".

From the aspects of government optimization of urban interface and market consumption upgrading, low-density luxury houses in the urban area have emerged. Large flats, courtyard villas, Chinese courtyards, sky gardens, luxurious facades and supporting facilities... have become the general trend of new housing in Yiwu in recent years and the involution posture of real estate developers.

“After 2021, the good land auctions in 2022 and 2023 are basically low-density (Floor Area Ratio1.5 and below). "Wang Lei, a senior agent at Hongda Real Estate, gave a slightly exaggerated description of the minibus.

As evidence, it is not uncommon to see low-density urban plots with high premium rates. For example, in the first half of the year, the large plot of land in the center of Yiwu, the "Organic Renewal Qintang Plot 2", was bid for 46 rounds with a premium rate of 35.38%.

The trend of Yiwu land auctions in recent years is that low-density plots are increasingly available and more attractive. Accordingly, according to the List of Yiwu's Stock Residential Land Projects (Second Quarter of 2024):There are 14 low-density residential buildings with a floor area ratio of 1.5 or below, accounting for nearly 27%.

Transmitted to the second-hand luxury housing market, "It is normal for a house worth 10 million to increase by 300,000 or 500,000 a year", "Townhouses are increasing in price every year, this product is scarce," several real estate agents told Xiaoba.

In sharp contrast, the overall decline of Yiwu's real estate market is no different from the national real estate market.

According to Anjuke data, in the past three years, the listing price of second-hand houses in Yiwu has dropped from a high of 25,941 yuan/m2 to 20,710 yuan/m2 in early August this year; the listing price of new houses has dropped from a high of 33,500 yuan/m2 to 22,109 yuan/m2.

In summary, the alternating hotness of Yiwu land auction and luxury housing market in the first half of this year is:This is an extension of the rise of the mid- to high-end real estate market in Yiwu city in recent years.

Sources of high-end purchasing power: foreign trade accumulation + demolition dividend + homestead reform

It is not difficult to understand that when a high-end real estate market with scarce location and product upgrade advantages appears in Yiwu, it is attractive to Yiwu's wealthy groups from the perspective of living experience, current asset preservation and even investment potential.

"There is a construction engineer who said that a project worth tens of millions only made a few hundred thousand in profit; some factories have more than 100 people and a high turnover, but the actual profit is very little." These situations give us a glimpse into the willingness of even those with poor business operations to invest in high-end residential properties.

"They only dare to acquire land when there is demand from the people. They don't dare to acquire land if there is no demand," the industry insider continued.

Building under construction Source: Photo taken by Xiaoba

For example, Wang Lei and Xiaoba mentioned: A local home buyer saw the hot luxury home transactions but was not very reassured, so he specifically found him to consult and analyze the value of a new luxury home that was about to be launched. With his encouragement, he chose to freeze his funds to participate in the lottery, and successfully won the lottery. After winning the lottery, he bought a second-hand villa.

There is also a "vertical building" that sells for about 11 million yuan.Because the landlord was in urgent need of funds, he reduced the price by 2 million and sold it quickly. After the transaction was completed, the price of the house instantly rose back to 11 million yuan.

Another senior agent from Mingjia Real Estate, Liu Guodong, mentioned:

A Suzhou-born lady boss who runs a live-streaming e-commerce business in Hangzhou drove from Hangzhou to Yiwu last month in the rain. After looking at six luxury houses in 10 hours, she bought a villa with a transaction price of 8.36 million yuan at 1 a.m. The lady boss started her business in Yiwu, but because of the involution of the Hangzhou market, she decided to return to Yiwu for development.

The landlord, the counterparty of the transaction, exchanged the house for a luxury house worth 13 million yuan a few days later.

“The characteristic of Yiwu market is fast turnover.For example, some of my old customers bought a house this year, but found some flaws during the decoration or actual living process, so they would consider buying a better one the next year. "Liu Guodong told Xiaoba.

As for the source of this strong purchasing power, one thing is well known: Yiwu has many small and medium-sized business owners, abundant private funds, and relatively stable industries.

Official data show that over the past decade, the number of market operators in Yiwu has grown from 170,000 to more than 1 million, accounting for 0.5% of the country and 1% of Zhejiang Province;From 2021 to now, Yiwu's foreign trade exports have been growing at a high rate of around 18%-20%.; Yiwu's per capita disposable income reached 83,954 yuan in 2023, a year-on-year increase of 7.3%, second only to Shanghai's 84,834 yuan and higher than Beijing's 81,752 yuan.

However, there are two points that are easily overlooked. Since 2016, Yiwu has had two rounds of large-scale urban demolition campaigns, and the urbanization rate has increased from 76.2% to 81.6%, approaching Beijing, Shanghai and Tianjin. During this period, a group of people who became rich through demolition were also created.

In addition, since 2015, the country's first "three-rights separation" system of rural homestead ownership, qualification rights, and use rights has also gradually taken shape in Yiwu's homestead trading market.

Official data shows that Yiwu City has collected about 16.44 billion yuan in paid site selection fees for homesteads over the years. Through the handling of historical issues of rural houses, paid use, paid site selection, homestead transfer ownership income, cross-village resettlement, and land coupons, the city's rural collective income has reached nearly 20 billion yuan.

As a result, in the Yiwu market, there is a unique product that is as popular as ordinary luxury homes and has lasted for a long time - the "vertical building". It is largely the product of the demand created by Yiwu's prosperous industry and the purchasing power released by large-scale demolition and homestead reform.

What is a "vertical building" (also called vertical division along the street)? It refers to a commercial and residential building with a single property right, which can be rented out as a store, warehouse, factory, residence, etc., with an annual rent of about 200,000 to 400,000 yuan. It includes vertical buildings with state-owned property rights, collective property rights and individual property rights along the streets and towns in urban areas.

State-owned vertical building Source: Photographed by Xiaoba

“Last year, two to three units were sold every day. The vertical building with a price of about 10 million yuan had a premium of about 500,000 yuan. The one with a price of about 15 million yuan had a premium of about 1 million yuan. Some units near the trade city have increased by two or three million yuan."Wang Lei of Hongda Real Estate described it.

"In the city center, everything is more strict. Many small business owners and small processing plants have moved to the urban-rural fringe," added Zhu Xiaogang, chairman of Hongda Real Estate.

Wang Lei and Zhu Xiaogang interviewed. Photo source: Photo taken by Xiaoba

The company started its business from scratch in 2018 and followed the craze for vertical building transactions. It is now a leader in the field of vertical building transactions, with an annual sales volume of 600 million to 700 million yuan and an annual transaction volume of two to three hundred units.

The vertical housing market and the luxury housing market promote each other and nourish Yiwu's real estate market.

Enlightenment from a real estate market supported by “local forces”

It is not enough to attribute the vitality of Yiwu's real estate market only to a small number of wealthy groups and policy factors.

If we were to define Yiwu's economy, the small commodity business can be regarded as the best representative of the "external circulation" economy. It continuously attracts talent, capital, and labor from home and abroad, and continuously exports products to home and abroad.

The Yiwu real estate market can be regarded as one of the representatives of the "internal circulation" economy.

One can even say thatThe active "internal circulation" of the real estate market is the core reason why Yiwu has taken a different path from the national real estate market.

In terms of basic factors: Yiwu has an area of ​​1,105.46 square kilometers, and the urbanization rate and foreign population continue to improve and increase, resulting in a long-term characteristic of a large population and limited land, and a scarcity of high-quality housing.

On the corporate side: In the land auction market, local enterprises (including state-owned enterprises and private enterprises) are strong, and there are many cases of acquiring land at high prices.

Take real estate companies as an example. For example, in December last year, the private enterprise Yiwu Xinmai Enterprise Management Consulting Co., Ltd. won the "Jiangwan Organic Renewal Block No. 5" with a construction area of ​​about 142,000 square meters and a floor area ratio of 1.3 for about 1.85 billion yuan.

The above-mentioned "Organic Renewal Qintang Plot 2" was sold for 1.76 billion yuan after more than 46 rounds of bidding. In addition to foreign real estate companies such as China Overseas, Greenland, and Jianhang, there were also a number of local real estate companies participating in the bidding, including Shangcheng, Lianli, Yongkang Hengqing, etc. In the end, it was won by the private enterprise Yiwu Yuling Trading (Lianli).

This amount of land acquisition ranks tenth in the ranking of real estate companies in Zhejiang Province in the first half of the year, which cannot be underestimated.

The product strength of local real estate developers is also well recognized by the market. For example, the hot-selling luxury residential properties in Yiwu in the first half of this year include properties owned by local companies such as Xuefeng and Badu.Sales of local real estate developers account for nearly half of the total sales, comparable to Greenland.

In the intermediary market, local small and medium-sized enterprises dominate the market, while national intermediary brands such as Beike, 51home, and Centaline have a weak presence. Short video channels, rather than house-hunting apps, are the main channels for intermediaries to acquire new customers. The acquaintance culture in transactions is still evident.

Live house selling Source: Xiaoba shot

In terms of consumer groups, in short: they are mainly locals and outsiders who have close ties with the "International Trade City" industrial chain, as well as locals who have benefited from various policies such as demolition and housing land reform. There are only a few special outsiders who speculate in real estate.

Therefore, Yiwu's real estate market can shape a unique and active vertical real estate market. The core demand point of Yiwu's luxury home customers is "mainly the pursuit of utilization rate" (according to industry insiders), which are closely related to local advantageous industries and policies.

Causally related to this, Yiwu’s urban supporting facilities mainly serve the big goal of “making money”; large shopping malls and consumer and entertainment-oriented commercial supporting facilities are not perfect, and there is a lack of entertainment and consumption atmosphere for citizens.

While the real estate markets in many cities are prone to falling into the contradictory relationship of dependence on foreign capital, real estate developers, intermediaries and home buyers, Yiwu's real estate market has a more solid local support force.

Perhaps because of this, Yiwu's active homebuying groups often do not have so many concerns. Once they realize that the product they have is not good enough, they will immediately switch to a product with greater appreciation potential. Houses that are just in need, large flats, luxury houses, and vertical buildings are often bought in turn.

However, even for a city like Yiwu that is "staying out of it", there are still concerns about the long-term sustainability of the hot real estate market.

For example, senior agents from two leading real estate agencies surveyed said that the number of orders has dropped significantly compared with previous years: one agency that deals with both rigid demand and luxury real estate projects has halved its order volume compared with three years ago; another agency that mainly deals with large-scale projects revealed that "last year, we had two to three units a day, but this year, we only have one unit every two or three days."

"Everyone has a concern that mid- to high-end properties are at high prices."This is how the 55-year-old local veteran Zhu Xiaogang summed it up.

His response was: 1. Supporting his more than 30 employees to continuously improve their business capabilities, especially their online visibility, and adhering to a salary policy of "no base salary + high commission"; 2. Forming alliances with more small agencies.

As he said when talking about his experiences over the years: always prepare for a rainy day.

Author of this article | Lin Bo | responsibilityEditor | He Mengfei

Editor-in-Chief | He Mengfei | Image source |VCG