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Property prices in Panyu,  a satellite city serving the Guangdong provincial capital city of Guangzhou, were supported by multibillion yuan infrastructure investments ahead of this year's Asian Games that the city will host in November.
But prices in Guangzhou had risen much faster and any further price gains in Panyu will now depend on sustained growth in the local economy and upgrades to the city's educational and medical facilities, agents say. 
Panyu was linked to the provincial capital by two MTR  lines in 2005 and a third line is due to be completed this year, ensuring quicker commuting times between the two cities. 
Its importance as a transportation hub in the province is underlined also by the fact that it is the downtown terminus for the Wuhan-Guangzhou Express Link.
These extensive transport links ensured that Panyu became an attractive dormitory location for people who work in Guangzhou. 'It takes only 30 minutes to drive to the Guangzhou city centre from Panyu,' said Gary Hung Fat-wing, associate director at Hopefluent Group Holdings, the largest property agency in Guangzhou. 
The area in which Hung lives in Panyu is close to Guangzhou and to get to his office requires just a 10-minute drive plus a 10-minute walk.
Also fuelling price rises in the Panyu market was the announcement last month that a consortium consisting of Guangzhou R&F Properties, Agile Property Holdings, and Country Garden, had bought the residential and commercial site allocated in the Guangzhou Asian Games City for 25.5 billion yuan (HK$28.97 billion).
The deal made the site the most expensive on the mainland. 
Responding to the news sellers in housing estates in the city had increased their asking prices by 10 per cent, said Huang Tao, a project manager at Centaline Property Agency's Guangzhou office.
Huang has lived in Panyu for more than 10 years. 'I like the low-density living environment and the air quality is better,' he said. 
Others, such as technician Zhang Zihua, prefer to put up with the higher density environment and live in Guangzhou. 
'Panyu is so far away from Guangzhou's city centre. Guangzhou is still more convenient and full of all sorts of community facilities,' said Zhang, who owns a three-bedroom flat in Guangzhou's Haizhu district.
'I'm sure the property price in Panyu will rise. But that is for the speculators. I buy property because I want an apartment to live in and it must be convenient and the price must be reasonable.'
David Rao, an artist's agent living in Panyu, says he is not interested in the  fact that  the city will host  the Asian Games.
'The area of Panyu I'm living in now is near Guangzhou,' he said. 
'The location for the Asian Games City is closer to Nansha. It takes me half an hour to drive from that part of Panyu to my home. So you see how inconvenient it will be. But I'm living here with my family, we are happy with our home and we won't consider moving.' 
The development of mid-priced  Clifford Estate attracted many families in search of a lower-density  environment to move from Guangzhou to Panyu, but the trend had since reversed, said Centaline's Huang. 
'Two years ago, there was a trend of many families moving back to the city centre of Guangzhou because of its better education and medical facilities. 
'That's why growth in average property prices in Panyu had lagged price growth in the city centre,' he said.
The property agency's data showed that prices of units in new residential projects in Guangzhou surged 50 per cent last year, compared with price rises in Panyu of some 20 per cent only. 
The price gap between Panyu and Guangzhou would not narrow in the next few years, said Huang, despite the fact that infrastructure in Panyu would continue to improve. 'It will still take at least an hour to go to the city centre from the Asian Games City by MTR. Combined with the long travelling time and poor education and medical facilities this will limit the source of buyers,' he said.



Panyu sees slower price rises despite new infrastructure