The Greater Bay Area presents rare opportunities (II)

Hong Kong Zhuhai Macau Macao Bridge

In last week’s column, I mentioned that many infrastructure projects are in construction to push for integration of the Greater Bay Area, and that the improved transportation system, as well as the massive flow of people and goods that come with it, will have an impact on housing prices in the area. In the past, the west bank areas of the Pearl River lagged behind Guangzhou and Shenzhen because of its underdeveloped transport system. When I first introduced Zhongshan properties to our readers back in 2015, home prices were approximately CNY5,000 per square metre, and since then it has tripled to CNY15,000 per square metre representing a much higher home price increase rate than other second- or third-tier cities in the country.

The rising home prices is reflective of the prospect that professionals working in Qianhai, Shenzhen, will be going back home to Zhongshan everyday via the Shenzhen-Zhongshan Bridge. The property price in Qianhai is currently CNY80,000-100,000 per square metre, so Zhongshan’s CNY15,000 per square metre home price is rather low in comparison. Unfortunately, Hong Kong buyers are no longer able to acquire Zhongshan homes due to purchase limits. On the other hand, the increased population will also boost prices of commercial properties and shopfronts, but substantial and continuous price increments will rely on the industry’s transformation and upgrade in the area.

There are three major free-trade zones in the Greater Bay Area: Hengqin, Nansha and Qianhai, each with different preferential policies as a means to promote different industries. Qianhai has set itself up to be a new financial hub, a position that I’m not very confident in. As long as foreign currency buying restrictions exist for Renminbi, the Hong Kong dollar will still have the advantage and Hong Kong as a financial centre won’t be replaced by Qianhai. The Chinese Government is developing Qianhai as a back up, and it can only come to the front of the stage if Hong Kong loses its function and status.

>> Property market in the Greater Bay Area

My bet is on Hengqin, which sees itself as a new tourist destination, a neutral position that doesn’t have much competition in China. With the rapid growth of the Chinese middle-class, travel expenses are expected to soar. Its proximity to Macau adds to the marketable appeal that’s rivaled by few Chinese cities, making Hengqin’s commercial properties hot commodity in the future.

Nansha, on the other hand, is hard for me to read. The push for the Nansha free-trade zone began back in the Henry Fok era, and was hoped to become the first stop for Hongkongers returning to the mainland. Unfortunately, there have been a lot of bumps in the path to integrate Hong Kong and China and past development of Nansha was far from successful. Following the fast advancement of Guangzhou, Nansha has repositioned itself to be a logistics centre that serves the Guangdong capital as well as the Greater Bay Area, but it faces fierce competition from cities within the area such as Gaolan Port in Zhuhai, Yantian Port in Huizhou, and even Hong Kong. It is bound to be a tall order for all of them to coordinate and cooperate. Luckily, Nansha, with its geographical advantages, is full of potential. Apart from logistics, it can potentially become a centre of high-end manufacturing or even IT support.

In any case, business and investment opportunities are abundant in the Greater Bay Area. By keeping an open mind, Hong Kong can be a seamless part of an integrated area and enjoy the benefits of the synergy; otherwise, it will inevitably be excluded and lag behind other cities in the region.

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