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Zone fuels Qianhai, Shekou homes prices

2015-March-17       Source: Chinadaily.com.cn

Property prices in Shenzhen's Qianhai and Shekou areas are expected to rise further as the FTZ will be officially established after the annual National People's Congress and Chinese People's Political Consultative Conference sessions.

Property prices in Shenzhen's Qianhai and Shekou areas are expected to rise further as the Guangdong Free Trade Zone (FTZ) will be officially established after the annual National People's Congress and Chinese People's Political Consultative Conference sessions.

The two areas have seen real estate prices surging since the FTZ was approved by the central government in December. Second-hand property prices in Shekou soared by 9.4 percent on average in January, compared with the previous month, with the biggest increase reaching 15 percent, according to statistics from Shenzhen Centaline Property.

"The creation of the FTZ will add fuel to the rising trend although with a slight effect," said Zhou Zhiwei, agency service manager at the Shenzhen office of Colliers International, a Seattle-based property service company.

Compared with three other first-tier cities on the mainland - Beijing, Shanghai and Guangzhou - Shenzhen's real estate industry takes up only a small proportion of its GDP. Therefore, a property bubble is less likely in the city, Zhou said. "This means there's little possibility that housing prices in Shenzhen will fall considerably in future."

Qianhai and Shekou will be included in the FTZ, along with Zhuhai's Hengqin district, Guangzhou's Nansha district and the Baiyun Airport Comprehensive Bonded Zone.

Expectations of further added value have seen some property owners hold on to their assets, leading to a steep drop in housing supply. The data show that the number of used homes for sale in Shekou declined by 34 percent within a month - from 472 in December to 310 in January. "Shekou's housing prices have been climbing since November, spurred by the loosening of the central bank's credit policy. The rising trend has become stronger after Shekou was approved as part of the FTZ," said Zhang Yao, an agent at Zhonglian Real Estate in charge of the Shekou market.

New properties in the zone have seen a significant price surge. Prices at Shuiwan 1979, a new residential area that opened for sale in December, have risen by 2,000 yuan ($310) on average since the FTZ was approved. "Apartments of 50 to 60 square meters at Shuiwan 1979 are sold at roughly 70,000 yuan per square meter," Zhang said.

Zone fuels Qianhai, Shekou homes prices

The situation is more conspicuous in Qianhai, which, apart from being within the FTZ, is also a key area for Shenzhen-Hong Kong cooperation. The number of enterprises registered in Qianhai has surged from about 17,700 to 21,600 within a month from December.

Another property agent said: "Sellers in Qianhai are highly positive. They believe that property prices in the area will reach 100,000 yuan per square meter in a year or two."

In the four-and-a-half years between August 2010 and January this year, average housing prices in Shekou had risen by 67.9 percent - from 24,155 yuan per square meter to 40,565 yuan. The surge was more startling in Qianhai, with prices climbing from 16,510 yuan to 34,441 yuan per square meter over the same period, posting a staggering 108.7-percent increase, Centaline Property data show.

Zhou said the inclusion of Shekou and Qianhai in the Guangdong FTZ has enhanced public expectations of the two areas.

"In the long term, housing prices in Shekou will depend on the overall development of the Qianhai-centered Pearl River Delta economic zone," he said.

 

More on this topic:

Property owners in Qianhai eye higher real-estate prices

Many homeowners in the Qianhai area withdrew their homes from the property market in hopes that the prices of their homes may skyrocket in the coming two years, as the area is included in Guangdong’s free trade zone program approved by the central authorities, Chinese-language media reported yesterday.

New Guangdong FTZ set to boost investment

The newly approved Guangdong Pilot Free Trade Zone will offer preferential policies for investment from the special administrative regions of Hong Kong and Macao, according to a top provincial official.

Editor: Olivia

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