Sea View Properties in Huizhou, Weihai, and Other Locations Experience Price Drops: Transactions for 145 sqm at 250,000 RMB, Large Number of Second-Hand Homes for Sale

The price myth of sea view properties is fading in city after city.

Combining mountains, sea waves, and snow, these elements create the social media image of Weihai, a newly popular destination.

This winter, some netizens chose to visit Weihai on the Shandong Peninsula instead of Switzerland or Hokkaido to experience the tranquility and desolation of a seaside city after a blizzard. Docked ships became photo spots, and the blizzard created a romantic aesthetic, leaving some saying, “Weihai after the snow gave me a bit of the shock that I couldn’t get from Northern Europe.”

Sea views have always been the “golden ticket” for tourism. From Qingdao, Rizhao, and Weihai in the north to Beihai, Huizhou, and Sanya in the south, these famous seaside cities always experience surges of tourists, attracting capital investment in local culture, lodging, and dining.

Among them, sea view properties are a significant presence. Since the concept of commercial housing took off in China, the craze for sea view properties has spread from Hainan northwards, with developers rushing to the coast to attract buyers with beautiful views and investment opportunities. However, due to industry adjustments and product attribute issues, a large number of low-priced sea view second-hand homes are now for sale, losing their former luster.

From the recently discussed Huizhou to the “old internet celebrity” Weihai Rushan, the myth of sea view property prices is disappearing in city after city.

The Controversy of Sea View Properties

Recently, Country Garden’s Ten-Mile Silver Beach Sea View Bay in Huizhou garnered attention due to a transaction record showing a 154.11 sqm property with 4 bedrooms and 2 living rooms sold for only 250,000 RMB, translating to approximately 1623 RMB/sqm.

The combination of sea view, proximity to Shenzhen, and ultra-low price shocked netizens. A local real estate agent confirmed the property was a “duplex,” with one unit selling for 250,000 RMB and another for 350,000 RMB. After additional fees, the actual price was about 4200 RMB/sqm, sparking another round of heated discussion about sea view properties.

On social media, “cabbage price” housing areas are known, one being Hegang and the other being Rushan. The former is in the vast northeast, while the latter is in Shandong, tagged as “sea view property.” Although actual prices in Rushan are higher than in Hegang, its reputation for low-priced “sea view properties” makes it unique on social media.

Overall, Weihai in Shandong, which includes Rushan, has seen the ups and downs of the real estate market, especially sea view properties, over the years.

Weihai, located at the eastern end of the Shandong Peninsula and surrounded by the Yellow Sea on three sides, boasts nearly a thousand kilometers of coastline, with the Huancui District, Wendeng District, Rongcheng City, and Rushan City. The region is known for its scenic beauty, clear waters, over 30 bays, and 168 islands. It is one of the few cities in northern China with such landscapes.

A popular tourist spot in Weihai features a blue coastline merging with the sky, with rows of foreign-style villas near the beach. Despite not being the peak tourist season, young people flock to the beach. On Liugong Island off the coast, seagulls interact closely with tourists on cruise ships, showcasing the charm of a seaside city.

These unique tourism resources once made Weihai a hot spot for sea view properties.

A widely spread saying is, “Half of Weihai’s sea view properties were bought by people from Beijing, while most in Sanya and Beihai were bought by people from the northeast.” It is said that from 2005 to 2010, Beijing residents frequently received text messages about Weihai sea view properties, with real estate companies organizing bus tours for potential buyers.

At that time, as Beijing’s property prices rose yearly, the prospect of owning a sea view property in Weihai with just a down payment of tens of thousands of RMB was highly tempting for the middle class. Dreaming of a life “facing the sea, with spring flowers blooming,” they became one of the main forces buying sea view properties in Weihai.

Rushan’s Silver Beach was a particular focus of these dreams. Public information shows that at its peak, 500 properties were sold in a day at Silver Beach, with purchases often made through connections or in a rush. Many people from other provinces were brought to Rushan by tour groups, buying properties without thoroughly evaluating the local environment or whether the prices were reasonable.

Due to overdevelopment and an oversupply, the situation at Silver Beach soon changed. In 2013 and 2015, CCTV reported on unfinished sea view properties, developers fleeing, and market destocking issues in Rushan. However, affected by another round of real estate market rises, the Weihai market experienced another period of speculation.

According to a report by Keer, in 2016, Weihai’s property prices doubled from 5000 RMB/sqm to 8000 RMB/sqm alongside the rapid rise of the vacation market, with Evergrande Sea View Scenery’s entry price breaking 10,000 RMB first. In 2017, the market entered a period of simultaneous growth in volume and price, with brand real estate companies like Poly and Huafa entering the market, pushing both new and second-hand property prices over 10,000 RMB.

However, the good times did not last. After inflating local property prices to high levels, the market began to decline. In the second half of 2018, the Weihai market turned downward; after 2019, it experienced a long-term decline in volume and price, entering a phase of price reductions in 2021. Property prices in the city dropped by 2000 RMB/sqm from their peak, and projects generally saw “low visitation,” a stark contrast to previous bustling times.

In the past year of 2023, data from Tengce Institute showed that Weihai’s residential property market operated stably, with supply volume decreasing by 6.6% year-on-year, a narrowing decline; transaction volume increased by 10.1% year-on-year, and the average transaction price decreased by 4.1%. “Customers are still cautious about buying properties, with a significant wait-and-see attitude and a preference for existing or near-existing projects.”

Large Number of Second-Hand Homes for Sale

“Sea view properties” sound appealing, but actual living experiences vary. Some imagine a vacation lifestyle but find they rarely visit, leaving the property vacant for most of the year; others discover that properties close to the sea, which they initially preferred, lead to issues with dampness, maintenance, and inconvenient living facilities, forcing them to sell at a loss.

Reporters saw a property on a real estate platform in the Rushan Silver Beach tourist and vacation area, a 64 sqm unit priced at only 106,000 RMB. Listed at the end of last year, its price has already dropped twice despite being so low.

From platform photos, the property appears as it was delivered by the developer, with a somewhat dilapidated balcony and no signs of recent occupancy. The agent handling the property mentioned that the owner rarely lived there after buying it years ago and is now selling at a low price. “The community is usually quiet in winter, busier in summer, mostly with older people from other regions. Top floor properties without elevators are hard to sell.”

Beyond Weihai and Rushan, there are many similar properties, such as a 55 sqm unit in a Rongcheng community in Weihai listed for 170,000 RMB, advertised as “right by the sea, a great place for retirement or vacation.” Another listing directly states, “First-line sea view property, lie in bed and see the sea,” with a price of only tens of thousands of RMB.

In other cities with numerous sea view properties, similar situations are not uncommon. For example, a 38 sqm property in the Daya Bay area of Huizhou is listed for only 125,000 RMB; in a branded real estate development in Huidong, a 79 sqm property is listed for 350,000 RMB, advertised as a “first-line sea view property.”

Overall, the second-hand property market in multiple sea view cities has seen price drops. For example, in Weihai, the Anjuke platform shows that in March, the average listing price for second-hand properties was 8089 RMB/sqm, a 9.72% year-on-year decrease, compared to over 9000 RMB at the beginning of 2021; in Huizhou, the average listing price in March was 9926 RMB/sqm, a 5.99% year-on-year decrease, compared to over 10,000 RMB at the beginning of 2021. Other cities like Beihai also experienced second-hand property price drops.

“The market downturn has led to an increase in the supply of second-hand sea view properties, with low-priced listings appearing,” Zhu Liping, a senior analyst at Zhuge Data Research Center, told Yicai. These low-priced listings are either from owners in urgent need of funds or from those with a pessimistic outlook on the sea view property market. During peak tourist seasons, some consumers prefer short-term rental vacations rather than purchasing properties.

It’s worth noting that the large number of sea view properties for sale is related to past oversupply. Taking Rushan as an example, during the early sales boom, a large number of properties were developed along the 20+ kilometer coastline of Silver Beach, with over 200 communities, far exceeding demand.

The Weihai market also experienced a period of excessive land supply. Keer stated that before 2018, local real estate companies in Weihai intensively hoarded land, later facing market downturns and unsold properties. In 2018, the market declined, but government land sales did not decrease, with 37 residential land parcels sold in 2020. In 2021, the government significantly reduced land supply, giving the real estate market some breathing room.

“Many are selling second-hand properties at a loss, and the overall market is not doing well,” a local real estate agent in Weihai stated. The government is also controlling land supply to adjust the real estate market supply and demand, digesting existing housing stock.

Despite frequent cases of sea view property price drops, in reality, attracting people from other regions to buy sea view properties based on information asymmetry is still common. Recently, reporters saw a salesperson in a Hebei mall encouraging an elderly woman to sign a contract to buy a property in Rizhao, Shandong. The elderly woman expressed confusion and unease, while the salesperson suggested she sell her old home and move to a distant sea view property.

However, the vacation nature of sea view properties also leads to high vacancy rates, low foot traffic, and difficulty in keeping up with amenities. As a result, in this round of price drops, vacation sea view properties have become one of the product types with the largest decreases.