Sizzling Hainan evokes Dubai
Property prices in Hainan have soared in the last two months since the central government announced aspirations to turn the tiny southern province into an international tourist island spread, according to a local property agent.
Hoping to ride the boom, property speculators have been purchasing en masse, sometimes up to 60 apartments at once, according to a sales manager at the Jintai Real Estate Development Company in Haikou, the capital of Hainan.
The manager, who asked to remain anonymous, said Wednesday that some prices have gone from 6,000 yuan a square meter to 15,000 yuan.
That type of inflation is rare, but not always a good thing. The price hikes have some government officials, market analysts and local residents speculating as to whether Hainan could become the next Dubai, which was rocked last year when its rapidly expanding property bubble burst.
To contain speculative investment, housing authorities in the city of Sanya imposed a quota on outside investors (non-Sanya residents) last week, limiting the amount of property they can buy there to five per person, China Business Network reported Wednesday.
Two weeks before that, the Hainan provincial government announced the suspension of land sales and a new land development project until the blueprint for the international tourist island is approved.
But curbing measures aside, speculative buyers from across the country have flooded into
Hainan in hopes of snatching up property on the cheap. The migration of sorts started soon after the government unveiled in November that the goal is to turn the province into a tropical tourist destination in the next 10 years.
From January through November, the total area of property sold in Hainan reached 435,6500 square meters, up by 42.9 percent, year-on-year, and the total sales volume hit 27.7 billion yuan, surging 71.4 percent.
On January 4, the State Council formally approved the Hainan plan.
One week later, 700 apartments in the Phoenix Island building project in Sanya, a popular tourist destination in Hainan, were sold on the first day they were available for sale, with the average price reaching 65,000 yuan ($9,523)per square meter.
And the average price of a project by developer Shanyuhu in Sanya soared from 13,000 yuan a square meter to 35,000 yuan.
Hou Lining, a Beijing resident who bought a building in Sanya last year, told the Global Times that some of her friends who invested in Hainan's property market sold the property they bought on the same day and still made profits of at least 100,000 yuan.
Buyers are mostly outsiders, including from Beijing, Shanxi, Jiangsu and Zhejiang, according to the Jintai Real Estate sales manager. And group purchases, especially those made by people from Wenzhou, a booming city in Zhejiang, could make up half of the housing sales, he said.
In Dingan county, a businessman from another province bought 60 apartments at the Changmao Zhongrun spa city project and paid for them in a lump sum, the Xinhua News Agency reported.
However, most of the local residents who live day-to-day on their salaries and wages were left out of the "gold rush."
Zhao Yong, a Haikou resident who earns about 2,000 yuan a month, told the Global Times that he may never be able to buy an apartment if the prices there keep rising.