Mini Hong Kong property market being created in Chinese boom town
20-07-2012
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Prices for some new residential projects near Qianhai, just an hour by car from Hong Kong, average around 33,800 yuan ($5,300) per square metre. That is nearly double the going rate in Shenzhen.
Growth in residential property prices in China's major cities has outpaced that of average household incomes by 16 times over the last two decades, according to a Credit Suisse report. Fears of a bubble led to a series of tightening measures to rein in prices, which fell in 21 cities in June versus 40 in May, according to official data.
‘It's too early to decide whether it will become a bubble,’ said Raymond So, Dean of School of Business at Hang Seng Management College in Hong Kong, told Reuters, adding that that zoning plans are not yet in place, making it difficult to assess the real value of property in the Qianhai area.
Qianhai is said to resemble Shenzhen three decades ago before it became a pioneer of China's economic reforms. In 1980, the city was no more than a bucolic backwater of 30,000 villagers living off paddy fields and the sea.
Qianhai officials signed co-operation deals with 37 companies in Hong Kong this week, while Chinese private equity firm Hony Capital said it had been appointed to bring leading foreign funds to the zone, a sign that China is wasting no time in developing the area.
Sales figures indicate strong demand. Rongjiang Tianyu, an apartment complex being developed by Shenzhen Rongjiang Industry Co Ltd, has less than 10 units left out of 156 that went on sale on July 04.
Dananshan Ziyuan, a block of town houses, went on sale in early June and about 10 of 91 villas are left, while one of two 100 million yuan houses has been sold.
