Property markets in the mainland's second-tier cities offer higher growth potential for investors on strong economic growth and low investment costs, according to property experts. Among such cities, Tianjin is seen as a new magnet for foreign capital. 'The outlook for the city is promising in view of its fast infrastructure development and solid economic growth,' said Ivan Ko, head of SW Kingsway Capital's real estate division. Mr Ko said Tianjin was highlighted by Beijing authorities as a city to be developed under the country's 11th five-year development plan. 'The city has been attracting overseas developers, reflecting its importance and growth potential,' he said, adding that the company would also consider investment possibilities. Hang Lung Properties paid 788 million yuan for a site on Binjian Road in Tianjin's Heping district to develop a 150,000 square metre shopping centre at the start of last year. Early this year, Cheung Kong (Holdings) and Hutchison Whampoa planned to develop a residential-commercial project in the city for 3.4 billion yuan. 'Tianjin's gross domestic product saw 25 per cent growth in the first six months - even higher than that of Shanghai and Guangzhou,' said Raymond Kwok Ying-lung, executive director of Midland Realty's China unit. Home prices in the city have seen steady growth. Prices grew 8.8 per cent to 4,960 yuan in the first seven months of this year. Last year, home prices averaged 3,918 yuan per square metre, up 17 per cent from 2004. Lau Chi-chung, a director of Midland's China unit, said individual investors would see higher investment return from Tianjin homes. 'Rental return is about 7 per cent, similar to that of Beijing. But the selling price of a Tianjin home is just 60 per cent of that in Beijing. Capital value growth potential is higher,' Mr Lau said. Apart from Tianjin, Midland is also optimistic about the investment potential for Chongqing and Hangzhou. Home prices in Chongqing's primary market grew 7 per cent in the first seven months on top of 63.8 per cent from 2000 to 2005, thanks to the improved affordability. The property agent expects to see a further 5 per cent to 10 per cent rise in the fourth quarter of this year. Unlike Tianjin and Chongqing, which have seen strong sales in mass housing, Midland said high-end properties in Hangzhou, near Shanghai, would see better growth potential in view of the city's location and pleasant environment.