Sizzling Hainan evokes Dubai
He currently lives with his wife and son in a 30-square-meter apartment that he rents at 500 yuan a month.
Data released by the National Bureau of Statistics of China shows that the average disposable income of Hainan residents in the first three quarters of 2009 was 11,622 yuan, a rise of 12.6 percent.
The property fever in Hainan has also brought back memories of a similar property boom there in the 1990s.
The average property price rose from 1,400 yuan per square meter in 1991 to 7,500 yuan in 1993, the 21st Century Business Herald reported.
In the aftermath of that property bubble burst in Hainan, uncompleted buildings with exposed steel bars could be seen everywhere on the island in 2003, compelling the local government to raze the buildings, most of which had been built on speculative investments.
In 2000, the average property price in Sanya was reduced to no more than 1,000 yuan per square meter, compared with an average price of 10,000 yuan last year.
"The soaring property prices will pose a real risk to the future national economy," warned Liu Weixin, an economy researcher at the China Academy of Social Sciences.
People are blindly investing in Hainan's real estate market, and they are all ignoring the past lessons created by the property bubble in 1993, Liu said.
"Hainan is not lacking infrastructure, but better personnel training and service; the building of a tourist city can't depend on the boom of the housing market," he said, warning of Dubai's fate if the inflation trend continues and the market isn't better regulated.
Statistics shows that tax revenue from construction and real estate industries accounted for 48.2 percent of the total revenue in Hainan last year. Among the 10 billion yuan treasury income, the majority came from revenue from land sales.