Tiny Beijing apartment sells for 2.5 million yuan

A tiny apartment in a Beijing’s hutong measuring only 6.7 square meters fetched 2.5 million yuan ($385,000) at auction on Tuesday.

The single-story space in Tongjing Hutong sold for 373,000 yuan a square meter despite having no attached bathroom and kitchen.

The property had been seized by a district court after its owner had been convicted in a private lending case.

However, a nearly-condemned property located near Tiananmen Square does come with a few perks. It is located within one of the city’s best school districts – and will most likely soon be demolished.

This second part especially caught the eyes of the property’s 49 bidders on Tuesday, all looking to cash in on what would be hefty compensation from the Beijing government.

“All these old properties will be pulled down,” explained a Tongjing Hutong resident. “Cash compensation is 135,000 yuan per square meter and the property owners also get a one-bedroom or two-bedroom apartment based on family size.”

Real estate analyst Zhang Dawei explained hutong properties facing demolition are attractive investments because owners often sell off the new apartments acquired in compensation deals for high prices.

“Single story hutong houses have unique property rights and relatively low takeover prices,” said Zhang. “Its value isn’t everything on the table.”

Zhang said that such purchases do come with risks, as policies often change and spaces smaller than 7 square meters are not eligible to be registered addresses in the school district.