(Yicai Global) May 16 -- Hebi, a city in China’s central Henan province known for its coal industry, has become an internet sensation because of its low house prices.

An online store vendor recently claimed on Chinese social media that since 2020 he has bought eight apartments in Hebi for a total of CNY100,000 (USD14,385), with the cheapest priced at CNY1,000 (USD144) plus CNY1,000 brokerage fees.

But homes in Hebi are not as cheap as the person claimed. Yicai Global found that homes in the city are priced at an average of CNY6,099 per square meter, or about CNY730,000 per apartment, which is three times that in Hegang, a city in northern China famous for its low housing costs, according to figures from property website Creprice.

Hebi’s real estate sector is weak because of slow urbanization, population loss, a low birth rate, and an imbalance in regional development. Housing investment fell 23.3 percent to CNY7 billion (USD1 billion) last year from 2021, with sales down 14 percent to 1.8 million sqm.

The city is also eager to solve the problems common among industrial cities, such as its decreasing dependence on coal resources and environmental pollution.

Hebi and Hegang have certain similarities like net population outflows, being relatively unknown, a low turnover rate, and a large supply of second-hand homes, said Yan Yuejin, head of research at Shanghai E-House Real Estate Research Institute. House prices in Hebi are low also because it has only a few districts and counties, Yan added.

To promote its industrial upgrade, Hebi is working on digital, smart, and green reforms in the fields of electronic appliances, new chemical materials, food processing, and magnesium-based new materials.

The city’s digital economy transactions totaled CNY14.7 billion (USD2.1 billion) last year, up 124 percent from the year before, while the coal industry’ share of its gross domestic product fell to less than 5 percent, according to the local government’s website.

Hebi’s GDP rose 1.4 percent to CNY25.9 billion in the first quarter of this year from a year earlier, according to preliminary figures, far lower than that of other cities in Henan province.

Editor: Futura Costaglione