Hainan probes for healthy property market development
Blessed with incredibly beautiful beaches and tropical scenery, China's southern Hainan Island is a tourist hotspot. Following the government's strategy to make Hainan an international tourism destination, the island's property market has seen a flurry of investment since the latter half of last year, driving up its property prices many times over. But the local government says it has taken measures to ensure that Hainan won't suffer the same fate it did in the 90s, when the property bubble burst.
Hainan's real estate market was among the first to prosper in China, but was also among the first to collapse in the 90s, leaving the island with numerous half-built resorts. It took Hainan's property market more than a decade to regain momentum.
In 2009, the government decided it was going to turn Hainan into an international tourist destination. The news led to a rise both in house prices and the volume of property transactions on the island, with some houses reaching over 20,000 yuan or 3000 dollars per square meter. In some cases, property prices jumped 5000 yuan in one day. Some developers even suspended sales, hoping for increasingly higher prices.
Hainan's provincial government stepped in at the beginning of the year. It suspended land transfers, as well as approvals of new property development projects, until this month. The measures worked. Here's Hainan deputy governor Jiang Sixian.