Some things are worth more dead than alive. When it comes to buying plots in cemeteries in China’s first-tier cities, even state-owned media has ridiculed the surge in prices for these special types of property assets, which in many cases are worth more than residential areas.
The high property prices highlighted by the Xinhua Agency came on the day of the Ching Ming Festival, when most Chinese take part in tomb-sweeping for their ancestors in a traditional Chinese ritual of filial piety.
Xinhua reported that plots of land in some cemeteries in Shanghai and Beijing were priced four to six times higher than residential apartments in the same neighborhoods.
The word “cemetery” became a hot search item, especially when associated with keywords like “Beijing peripheral” and “quick search on cemetery,” indicating the tendency for big city residents wanting to be interned in cemeteries nearby.
The top 10 cemeteries in Hubei, adjacent to Beijing, were priced at between 3,800 and 40,000 per square meter. A strong selling pitch was that they were only 45 to 100 kilometers from Beijing.
A similar case was seen in Haigang Lingyuan with a Shanghai cemetery run by the Hong Kong-listed Fu Shou Yuan International Group. A standard 1.2 square meter cemetery plot was selling at 140,000 yuan, compared with the nearby residential price of 30,000 to 35,000 yuan per square meter.
Some people paid about 60,000 yuan (US$9,514) per square meter for a permanent home in Daxing, a southern suburb of Beijing beside the Yongding River, but residential sites on the other side of the river are now selling for only 10,000 yuan per square meter.
A plot in a cemetery is smaller and yields a better return in what some expect to be an annual surge of 20%.
Fat profit margins were also shown in the report cards by cemetery operator China Wan Tong Yuan (Holdings), which listed in Hong Kong last year, and the cemetery division by A-share Fortune Ng Fung Food (Hebei). Both companies reported a staggering profit margin in excess of 80%, much higher than the notoriously high margins of property developers.
In China, there is no better business than the cemetery business. But whether these companies will continue to enjoy high profits is questionable after the Xinhua report.