The Zhuhai government has withdrawn all real estate property purchase restriction orders in March 2016 and the city’s property market has regained its momentum since then. A 78,000-sqm residential plot in Jinwan district was sold for a shockingly high price of RMB 19,050 per sqm of permissible GFA in mid-July. Its accommodation value is not only higher than the “land kings” previously sold in the city’s core area and the Hengqin district, but has also reached the highest price for all Zhuhai residential plots sold. The high land price has stimulated the secondary market in the area, with many of the home owners immediately raising asking prices for their properties following the successful land sale.

In fact, a similar plot in the area was sold at the end of January 2016 for RMB 6,730 per sqm of GFA, meaning that land prices have surged a staggering 1.8 times in less than 6 months. Considering the current accommodation value of RMB 19,050 per sqm, adding development costs and an appropriate profit margin, prices for units of the Ginwan plot project are estimated to reach around RMB 30,000 to RMB 35,000 per sqm. With first-hand units currently selling at around RMB 11,000 per sqm in the area, the recent land sale price reflects the fact that developers are expecting home prices in Zhuhai to rise over 2 times within the development period.

A research on home prices of the country’s 100 major city was published earlier this month. According to the report, Zhuhai’s home prices averaged at RMB 16,844 per sqm in July, rising 2.51% m-o-m and 27.3% y-o-y to reach the 9th highest in China. In fact, home prices in Zhuhai had been rising consistently in the first 7 months of the year, and at the same time, the monthly number of transactions has also increased. Number of transactions has first exceeded 7,000 in Zhuhai’s primary residential market in July, reaching a figure that is over 175% greater than that was recorded same period last year.

Zhuhai’s residential market is expected to remain strong in the near future as demand continued to be supported by positive factors, such as the expected opening of the Hong Kong-Zhuhai-Macao Bridge. Prices are also expected to rise to yet another new high. Nonetheless, an important thing to note about the Zhuhai residential market is that, the percentage of transactions involving buyers from outside the city is relatively high. According to the Zhuhai Statistics Bureau’s figures, primary residential transactions with non-permanent resident buyers took up 51% of total transactions in 1H2016 while 15.7% involved buyers from Hong Kong and Macau, meaning that more homes are bought by outsiders than are bought by permanent residents. The market’s high dependence on outside investors means that it can easily be affected by changes in property markets of other cities.