A successful industrial development zone in Suzhou with large-scale foreign manufacturers is energising the local home market. Behind its peaceful image of a 2,500-year-old garden city about a 90-minute drive from Shanghai, Suzhou had the most expensive housing in Jiangsu province last year. Average home prices reached 3,127 yuan per square metre, but inner-city housing commanding 4,000 yuan to 10,000 yuan is becoming more common. Suzhou saw its economy grow 17.6 per cent last year and attract foreign investment worth US$9.5 billion, one of the highest in the nation. The average annual income of urban residents rose 16.9 per cent, the fastest rate in the Yangtze River Delta, to 14,451 yuan last year. The fast-paced economic growth strengthened local purchasing power and helped improve the housing market, according to market observers. 'When we sold our project in the early 1990s, more than 95 per cent were sold to foreign buyers [including Hong Kong buyers], however, the number has dropped to about 50 per cent in recent years,' said Paul Tao, the managing director of New Heritage Holdings. He said an increase in mainland buyers was due to more relatively high-paid workers migrating to Suzhou from other cities. New Heritage is a Hong Kong-funded developer which has focused on mid- to high-end residential projects in the industrial zone since 1991. The prosperous development could be partly attributed to the government's effort in developing the Suzhou National New and Hi-Tech Industrial Development Zone to attract foreign manufacturers of relatively high-value products, he said The zone is on the west side of the city's Grand Canal. International firms such as Motorola and DuPont have set up plants there. New Heritage has developed two residential projects, Suzhou Garden Villa and Suzhou Garden Court, in the industrial zone which have high-rise apartments and houses. According to the firm's vice-chairman Richard Tao, a unit in Suzhou Garden Villa sold for 6,500 yuan per square metre at the end of last year and the average unit prices in the project increased 30 per cent last year.