[Weekly Preview] School District Housing Prices Halved (AI Translation)
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文｜财新周刊 王婧，梁栋（实习）
By Caixin Weekly’s Wang Jing, Liang Dong (Intern)
又到一年开学季，各地公办小学招生规模缩水备受关注。越秀区是广州传统教育强区，2024年9月，区内公办小学一年级共计招生351个班，同比减少74个；中心城区天河区公办小学一年级共计招生408个班，同比减少53个。
Another school year has arrived, drawing attention to the shrinking enrollment size in public elementary schools across various regions. Yuexiu District, a traditional education stronghold in Guangzhou, plans to enroll 351 first-grade classes in public elementary schools in September 2024, a drop of 74 classes compared to the previous year. In the central Tianhe District, public elementary schools plan to enroll 408 first-grade classes, a decrease of 53 classes year-on-year.
房产中介们最早感受到寒意。每年3月至6月是学区房买卖旺季，往年房源备受追捧，而现在供需关系趋向均衡。“在学区房最火爆的时期，可能是十个客户争抢一套房源。”一名广州中介告诉财新，“现在优质房源可能也就一两个客户同时在看。”
Real estate agents were the first to feel the chill. March to June is typically the peak season for buying and selling school district properties. In previous years, these properties were highly sought after, but now the supply-demand relationship is tending toward balance. "During the peak of school district properties' popularity, you might have had ten clients vying for a single listing," a Guangzhou-based agent told Caixin. "Now, even for premium properties, there might only be one or two clients looking at them at the same time."
在各类房源中，学区房溢价最高。例如前些年在北京，哪怕是单价高达30万元/平方米、面积只有5至15平方米的“老破小”，只要确定可以“保送”孩子进入名校，家长们也愿意一掷千金，不为居住，只为“占坑”。
Among various types of properties, school district houses carry the highest premium. For instance, in recent years in Beijing, parents were willing to splurge on small, old, and dilapidated apartments priced as high as 300,000 yuan per square meter and measuring only 5 to 15 square meters. As long as these properties guaranteed their children a spot in prestigious schools, they were not purchased for living but for securing a place.
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- Enrollment in public elementary schools is declining, with Guangzhou's Yuexiu and Tianhe districts planning to reduce first-grade classes by 74 and 53 respectively in 2024.
- The real estate market for school district housing is cooling, with prices plummeting and demand decreasing significantly, particularly in first-tier cities like Beijing, Shenzhen, and Shanghai.
- National strategies are being implemented to promote balanced education and equitable distribution of educational resources, affecting the demand and pricing dynamics of premium school district properties.
The new school year arrives, raising concerns about shrinking public elementary school enrollments in various regions [para. 1]. In Guangzhou's Yuexiu District, the number of first-grade classes in public elementary schools will drop by 74 to 351 in September 2024, while central Tianhe District will see a decrease of 53 classes, totaling 408 [para. 1]. Real estate agents report a cooling demand for school district properties, a stark contrast to past years when these properties were highly sought after [para. 2]. Despite still maintaining certain transaction volumes, prices have halved compared to a few years ago [para. 4][para. 5].
In 2015, China adopted the two-child policy, causing a peak in the number of newborns in 2016 and 2017. However, subsequent years experienced a continuous decline [para. 6]. Primary school enrollments, which surged earlier, have now peaked and will significantly decline from 2025 onwards [para. 7]. Concurrently, policies emphasize the balanced development of compulsory education, aiming to narrow the educational gap between regions through methods like teacher rotation and group-based schooling [para. 9][para. 10]. These policies are beginning to show their effects [para. 9].
Parents' desire to provide the best education for their children still drives demand for school district housing, but decreasing numbers of school-age children and education equalization policies inevitably lead to a cooling market [para. 11]. The once crucial “old, small and dilapidated” school district properties are also losing their sheen. For example, the Bagualing area in Shenzhen saw massive price drops, with single room prices plunging over 70% from December 2020 to July 2024 [para. 14][para. 15]. Similarly, in Beijing, the prices of renowned school district properties in Xicheng District have dropped from RMB 170,000 per square meter in 2019 to around RMB 100,000-120,000 currently [para. 17].
The phenomenon of declining school district house prices is also evident nationwide. In first-tier cities, many of which have high proportions of non-native populations, like Guangzhou and Shenzhen, school district houses have not been immune, seeing price drops of more than 30%-40% [para. 21]. The downtrend reflects broader changes in the real estate market and a demographic shift, emphasizing education equalization policies and declining birth rates leading to a decrease in demand for such properties [para. 35][para. 36]. In Beijing, rapid adjustments in admission policies, such as multiple-school zoning implemented in Xicheng District, contribute further [para. 23].
Regions like Guangzhou are improving educational resources’ distribution. Measures like group-based schooling are being implemented to ensure balanced education across the city. As of mid-2024, Guangzhou introduced 177 basic education groups, covering around 600 primary and secondary schools [para. 43]. The shift in policy aims to alleviate parental anxiety over securing spots in top-tier schools and diminish the overwhelming demand for school district properties [para. 46].
Quota allocation policies further influence parents’ decisions, such as in Guangdong Province, where a significant portion of high school admission quotas are distributed among various middle schools within the region to favor underperforming ones [para. 47]. This is aimed at ensuring a fair distribution of educational resources [para. 49].
Despite some differences in perspective, such as lower acceptance of affiliate schools in Beijing and Shanghai, compared to Guangzhou and Shenzhen, the trend shows an increasing reluctance among parents to chase school district properties at the cost of their quality of life [para. 55]. The real estate market, particularly for school district housing, reflects broader socio-economic dynamics, including educational reforms and demographic changes, pushing towards achieving educational equity [para. 59].
- Beike
贝壳找房 - Beike Zhaofang App data showed that by July 2024, the listing prices in Shenzhen's Bagualing area dropped to 65,100 RMB/m², with transaction prices at 46,300 RMB/m², falling over 70% from their peak at the end of 2020.
- Leyoujia
乐有家 - Leyoujia is a property agency in Shenzhen. In its report on Shenzhen school district housing, Leyoujia highlighted that the average transaction price for key school district properties dropped from 93,500 yuan per square meter in 2021 to 68,500 yuan per square meter in the first 11 months of 2023, marking a 26.7% decline.
- October 2015：
- China announced the full implementation of the two-child policy.
- 2016：
- The number of newborns nationwide reached 17.86 million.
- 2017：
- The number of newborns nationwide reached 17.23 million.
- From 2018 to 2023：
- The number of newborns nationwide dropped from 15.23 million to 9.02 million.
- July 31, 2020：
- The cut-off for new zoning policies in Beijing's Xicheng District.
- December 2020：
- A 13-square-meter single room in Bagualing dormitory area sold for a staggering price of RMB 169,600 per square meter.
- Second half of 2021：
- The real estate industry entered a downward trend.
- Between September 2022 and September 2024：
- Children born between 2016 and 2017 generally started primary school.
- May 2024：
- Elementary school enrollment in the Desheng area ended, noting changes in the admission thresholds.
- June 2024：
- Beijing lowered the minimum down payment ratio and interest rate floor for commercial housing loans.
- Starting from June 2024：
- Monthly transactions of second-hand houses in the Desheng area exceeded 100 units.
- July 2024：
- The listed average price of Hezheng Ruiyuan community was 82,900 yuan per square meter, while the transaction average price was approximately 73,600 yuan per square meter.
- By July 2024：
- The listed average price in Bagualing dormitory area dropped to RMB 65,100 per square meter, with an average transaction price of only RMB 46,300 per square meter.
- Starting from July 2024：
- Primary schools in the Desheng area began enrolling children who registered their household after July 31, 2020.
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