- Unit 121 on Lanman Hutong, about 10 minutes’ drive from Tiananmen Square and the Forbidden City, changed hands last month for 1.28 million yuan
- The new owner bought a 5.6-square metre (72 square feet) cubicle covered in bathroom tiles large enough to fit a bunk bed, with standing room only
A subdivided home in a run-down alley in Beijing recently sold for a record price at auction, as eager buyers piled in to get hold of its much sought-after address to gain access to some of the Chinese capital’s best schools.
A subdivided unit at No. 121 Lanman Hutong, about 10 minutes’ drive from Tiananmen Square and the Forbidden City, changed hands on November 11 for 1.28 million yuan (US$182,400) after 136 rounds of furious bidding during an auction in Beijing.
For 230,000 yuan per square metre (HK$23,850 per square foot), the new owner bought a 5.6-square metre (72 square feet) cubicle covered in bathroom tiles large enough to fit a bunk bed, with standing room only. That’s smaller than even Hong Kong’s notorious micro-apartments – also known derisively as shoebox flats or nano flats – which average about 200 square feet. A standard car parking space measures 126 square feet.
The auction result offers a peek into the growing speculative bubble in Beijing’s property market, a development that has defied more than two years of policymakers’ attempts to control. The average price of newly built homes rose 4.3 per cent in October to 60,894 yuan per square metre in Beijing, according to China’s statistics bureau data and Lianjia, a major real estate broker.
“Beijing’s homes have always been expensive, [particularly so] in Xicheng, where only the ultra-wealthy can afford to stay,” said Midland Beijing’s analyst Zhao Jia. “A million yuan is not expensive at all, to find space that close to the Forbidden City.”
Beijing’s average home price is equivalent to 24.9 years of the city’s median net income, excluding expenditures, according to data by E-House China Research and Development Institution. Hong Kong, the world’s most expensive urban centre to live and work in, requires 21 years of average income to affordable the average abode, according to the Demographia International Housing Affordability Study, as the city also boasts of a higher income and lower tax rate.
Unit 121 on Lanman Hutong is located among a cluster of siheyuan, as Beijing’s traditional courtyard homes are called. Bicycles, old washing machines and other household junk are piled along the maze of alleyways leading to the ground-floor unit.
Its auction drew 29 bidders starting from 470,000 yuan. The final winning bid prices the Lanman cubicle 35 per cent higher than a 100-million yuan villa with view of the Summer Palace in Beijing’s outskirts, on a per square foot basis.
To be sure, the unidentified buyer of the unit may be speculating for a quick flip, when the property is torn down, said Zhang Dawei, an analyst at Centaline Property Agency.
“This is more like a gamble, betting on the unit being demolished,” Zhang said. “If the odds are good, the buyer can pocket the [compensation], which could be several times what he bought it for. Even if it is not demolished in the short term, it is not bad to have some asset in the heart of Beijing.”
Source: SCMP
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