New area pushes up Guangzhou’s average price

Guangzhou’s housing market has been cooled after the new round of control measures was implemented last October. According to’s statistics, the average price for the city’s new commodity residential property was RMB 16,660 per sqm in February 2017, fell 7.1% compared with the peak in September last year. 6,809 units were sold in February, plunged 50.0% over the same period. Yet, significant fall in home price is unlikely this year, especially for some new areas which may even push up the average price. Villas of a new project in Guangzhi Area, located in West Haizhu District, have been sold for RMB 50,000 per sqm.

Many paper factories were situated in Guangzhi Area in the past, so it was called the “Paper City”. Along with the development of society, paper manufacturing industry went downhill. In 2014, the government announced to develop Guangzhi Area. Currently the area has various retail shops and good livelihood facilities. Regarding the transportation network, Yangang Station and the future Nanshi Lu Station of the Guangzhou Metro Line 11 are located in the area; Guangzhou-Foshan Metro Line 2 and the newly open Canton Tower-Wanshengwei Line of Circular New Tram also pass through Guangzhi Area. 4 large parks are located in the area as well. There are not many new projects in the area as major developers, namely Yuexiu, Greenland, Financial Street and Agile have just been purchasing lands there since 2015. Both Yuexiu and Greenland purchased a land at reserve price RMB 16,000 per sqm of gross floor area in June 2015. Agile won a land at a high price of RMB 23,185 per sqm afterwards and Financial Street even bought a land at RMB 26,217 per sqm.

Guangzhi Area is a high-quality and comfortable new area given the environment and facilities there. No wonder the new projects were sold at high prices. For a 92-sqm 3-bedroom unit sold at RMB 50,000 per sqm, the total price is RMB 4.6 million, which is much higher than average residents’ affordability. Yet, this kind of semi-luxury houses is sought by many people. Population in Guangzhou is high while land is scarce. Many residents who have been living in Guangzhou for many years want to continue living there, and some of them may want to improve their living environment by replacing their units. Besides, many parents assist their children to buy a house using their own savings. As such, the high demand supports housing prices to grow. Alongside brisk sales of new projects, secondary housing prices in the area have increased to RMB 35,000-39,000 per sqm.

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