Yantai looks beyond the housing glut in the Shandong city
City's hopes to weather slump are examined in the first of a two-part report on mainland cities
The coastal city of Yantai, in Shandong province, is suffering a housing glut like many other third-tier cities on the mainland.
But it is less speculative and the city's improving infrastructure is likely to cap any downside risk on its home prices amid the mainland's still unfolding real estate market downturn.
Although regarded as a third-tier city, Yantai's economy is bigger than that of the provincial capital Jinan, a second-tier city. Its gross domestic product grew 10.2 per cent last year to 561.3 billion yuan (HK$701.2 billion), exceeding Jinan's 523 billion yuan and second only to Qingdao's 800.7 billion yuan in the prosperous province.
Yantai's housing market has been predominantly driven by local end-user demand in the past few years and price gains in the past decade have been much milder than in top-tier cities.
It is thus widely considered less bubbly than peers such as Ordos and Wenzhou - the mainland's two most notorious ghost cities.
"Home prices rose at the pace of several hundred yuan per square metre per year in the past golden decade here, while they gained several thousand yuan per square metre per year in Beijing," said Zhao Long, a salesman at the Own the World City property project in Yantai's Laishan district.