Is Dandong’s soaring home price the first instalment of the Korean peninsula’s peace dividend?
April home prices jump 2 per cent in Dandong, the Chinese gateway to North Korea on the banks of the Yalu River, the biggest gain out of 70 cities
Dandong, the Chinese city bordering North Korea, registered the fastest-rising home prices in April among 70 Chinese cities monitored by the government, as tensions on the Korean peninsula eased.
The 2.4 million-population city in Liaoning Province within easy sight of North Korea across the Yalu River, saw new home prices jump 2 per cent over the previous month, the highest month-on-month increase among 70 closely monitored Chinese cities, according to the National Bureau of Statistics.
The jump followed North Korean leader Kim Jong-un’s visit to Beijing in late March, which appeared to cement warmer relations between both those countries, and North and South Korea.
The leaders of China and North Korea met for the second time in two months on May 8, when Kim stayed overnight in the northerneastern Chinese port city of Dalian – even taking a stroll on a beachfront walkway with President Xi Jinping – which again may well improve Dandong prices in May.
April’s Dandong home price rises were much bigger than headline official data had suggested, say local agents.
Du Yan from Golden Key, the city’s largest agent, said new home prices in the city’s new industrial zone bordering North Korea, where the largest supply lies, saw the most marked spike.
Properties facing the Yalu River jumped 3,000-4,000 yuan (US$471) per square metre early in the month to over 6,000 yuan by early May.
“The Arc, a high-end residential project in the zone, saw prices soar too, from around 6,000 yuan to nearly 10,000 yuan,” she said.
Faced with the sudden growing interest, city authorities have even now cancelled a biannual property trade fair planned this month, and on Monday imposed home-buying restrictions in the city.
Non-local residents will not be allowed to resell new homes within two years of purchase, according to a guideline issued on the municipal government’s WeChat account. The authorities will also require higher down payment ratios of at least 50 per cent for buyers applying for mortgages through the housing provident fund outside the city limits.
Most of the non-local buyers are from northeast China provinces, Zhejiang, Jiangsu and Beijing and they are typically paying 2-3 million yuan, snapping up four to five units at a time, she added.
Ironically, however, further grey diplomatic clouds have now reformed, after Kim on Tuesday said he had suspended officials talk between the North and South, and threatened to cancel a planned meeting with US President Donald Trump in Singapore in June.
Du said she was unaware of Tuesday’s latest developments, so would not comment on how those might affect Dandong buying volumes and prices. But she did say the buying spree has cooled in recent days, after peaking around May 10.
Another two cities in Hainan, the southern island province blessed with the high-profile title of “free-trade zone”, saw the next fastest new home price rises, the National Bureau figures show.
Both Haikou, the provincial capital, and Sanya, the tourism hub, saw 1.9 per cent month-on-month rises.
Around 50 cities across China had imposed home buying and selling restrictions up until April, according to top property agent Midland Holdings.
Nationwide, a record 58 cities of the 70 cities reviewed saw month-on-month price rises, a jump from 55 in March and the fastest pace in the past 10 months, despite heavy curbs.