Friday, July 20, 2012
Investors flock to buy property near newest Chinese boomtown
Investors are quickly buying up properties that constellate the prospective $45-billion Chinese business zone in the boomtown of Shenzhen, predicting that China's plans for "mini-Hong Kong" will boost real estate prices in the area.
Prices for some new residential projects an hour away from Shenzhen in Qianhai are already selling for double the going rate, even though zoning plans are not yet in place. According to Shenzhen Party Secretary Wang Rong, Qianhai collected investment pledges worth $47 billion as of July 16.
Due to the climbing rate of residential property in China's big cities over the past 20 years, many feared a bubble was forming, and measures were taken to lower prices, which fell in 21 cities in June versus 40 in May, according to a Credit Swisse report.
"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, when asked about Qianhai property values.
Qianhai, a "sparse and muddy area," is a 15-square-kilometrer experimental zone for service sector reforms that resembles Shenzhen 30 years ago, according to Reuters.
For more of the Reuters story: in.reuters.com
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