Guangzhou's residential property bubble burst long ago. After decades of state-planned housing projects, the 1980s and 1990s witnessed a surge in privately financed construction. This resulted in urban and suburban residential developments, such as Riverside Gardens and Clifford Estates in Panyu, and Jin Cheng Gardens near the city centre on Dongfeng Road. A feeding frenzy erupted in the housing market as families bought numerous residences and then rented them out, hoping that one day they would be able to sell them for a huge profit. They are still waiting. A glut of new apartments, funded largely by Hong Kong and Taiwanese investors, pushed prices down, stunting the growth of the market. In recent years, rental prices have nearly halved. Today, huddles of empty apartments and half-built office buildings are strewn throughout the city and in the suburbs. But despite a deflated housing market, elaborate residential developments are still being built for high-end clients with a 'build it and they will come' kind of philosophy. One developer in the 'field of dreams' is the Kingold Group, owned by Zhou Zerong, an overseas Chinese from Australia. During its 10-year investment history in China, Kingold has ploughed 10 billion yuan (HK$9.4 billion) into Guangzhou, in the form of property, education, agriculture and hi-tech industries. This year, Kingold is launching an ambitious plan to capture a section of the residential property sector, and is targeting high-end clients. Favorview Palace, located in Tianhe district, is being marketed as an exclusive residence for locals who love high living. The development boasts villas, gardens, lakes and spas. Baroque-style gates and spurting fountains give the impression that the development is definitely a place for the nouveau riche. According to some Kingold representatives, it is attracting mostly local clientele who have money to burn. 'We've already finished the first phase, and a lot of people have come in already,' said Albert Ng, general manager of the Kingold Group Hospitality Division. 'These include locals as well as expats. These are people who have spending power.' While developers like the Kingold Group prepare to reap big profits, about a dozen half-built, abandoned high-rise office buildings - such as the concrete monstrosity adjacent to the Garden Hotel on Huanshi Road - and scores of uninhabited residential abodes, clutter the city's skyline. Rather than focusing only on high-end consumers, who prefer to flaunt their wealth by purchasing homes in exclusive developments, the city and its residents would do better to encourage developers to refurbish these concrete eyesores and convert them into affordable housing complexes. Once again, Guangzhou city planners seem to be focusing on the perceived short-term gains from investment powerhouses like the Kingold Group. This is being done at the expense of a growing middle class, whose needs are being largely ignored - mostly because they do not wield the same spending power as their well-to-do neighbours.
