Home prices have been trending up year over year in Zhuhai, and the recent better-than-expected land tender result in Hengqin may just give the market an extra push. Nearby districts such as Jinwan have already seen their home prices leap up by 15 to 20% last year, and experts believe, given the high land cost, the growth in Hengqin could be even higher.
Along with Nansha in Guangzhou and Qianhai in Shenzhen, Hengqin at the south of Zhuhai City and adjacent to Macau was appointed to be a Special Economic Zone (SEZ) under the 12th 5-year plan. But unlike its peers, which focus mainly on financial services development, Hengqin positions itself as a hub for a number of industries, ranging from non-casino tourism, business and financial services, cultural innovation, education, research, hi-tech to healthcare.
Transforming into a world-class destination for Asian tourists, 56 key projects have already been committed with a total investment amount of RMB 226 billion in the next three years. Among which, Chimelong Ocean Kingdom will soft launch the first phase of Ocean Kingdom theme park, the largest theme park in China, while the new campus of the University of Macau will also bring in over 10,000 students to the island this Autumn. Other major developments include Shun Tak Holdings’ mix-use project near the Lotus Bridge and Keshanghui’s residential project at Shizimen Central Business District. With more developments forthcoming to accommodate its residents and visitors, the local government expects the population on this sparsely-populated island to grow from currently few thousands to 280,000 by 2020, while the annual visits to grow to 30 million by then.
Housing market in Zhuhai stayed robust this year. According to data released from the local statistics bureau, total transacted residential floor area in the first six months of this year reached 1.59 million square meters and total sales value reached RMB 19.82 billion – both the best first-half performances over the past decade. Along with strong sales, home prices in Zhuhai have been on an upswing and nearly doubled in the past five years, from less than RMB 7,000 per square meter in 2008 to RMB 12,540 per square meter in 2013. Nearby districts such as Jinwan, average home price has been up 15% to 20%, rising from RMB 7,000 per square meter to RMB 8,400 per square meter last year. In Hengqin, the Huarong Sea of Dreams, the only new project available for sale this year, is said to be priced at jaw-dropping RMB 25,000 per square meter, driving up asking prices of some nearby second-hand flats to over RMB 20,000 per square meter.
Looking ahead, we expect home prices in Hengqin to grow even faster with increasing population, improving infrastructure and rising affluence. In July, a residential site on the island was sold for an accommodation cost of RMB 15,874 per square meter and experts expect the flats on the site will have to be priced at at least RMB 30,000 per square meter for the developer to make reasonable profit. We believe the high land cost will set a benchmark and encourage both homeowners and developers to price their flats more aggressively, while the opening of Hong Kong-Zhuhai-Macau bridge in 2016, on the other hand, will give the much-needed housing demand from Macau and Hong Kong to the island in the future.