Greater Bay Area cities Guangzhou, Huizhou report increases in property sales and prices, as Shenzhen tightens curbs, pushes out demand

Name: 40 years of opening up and reform: How property became a driving force in the economy
Uploaded: 2020-09-22T00:30:15.000Z
Duration: 1 min 58 s
Description: 40 years of opening up and reform: How property became a driving force in the economy

The prices of new homes in Huizhou rose 1.9 per cent in August, while the prices of existing homes rose 1.7 per cent in Guangzhou

Tightened curbs in Shenzhen and positive outlook for Greater Bay Area are boosting purchases, analysts say

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The growth in transactions in Guangzhou has been influenced by proximity to Shenzhen. Photo: Shutterstock

Iris Ouyang

Published: 8:30am, 22 Sep 2020Updated: 7:51pm, 22 Sep 2020

Property sales and prices in the Greater Bay Area cities of Guangzhou and Huizhou rose in August amid a surge in demand from homebuyers in neighbouring Shenzhen, which has reintroduced property curbs, as well as optimism about the development zone.

The prices of new homes in Huizhou rose 1.9 per cent month on month for the biggest gain among the 70 major cities monitored by the National Bureau of Statistics. The increase in August was also the city’s fifth monthly rise. In Guangzhou, meanwhile, the prices of existing homes rose 1.7 per cent, topping the country in this category as well as climbing for a second straight month.

“Property policies have been tightened in [the neighbouring cities of] Shenzhen and Dongguan, leading to homebuyers and investors rushing to Huizhou and Guangzhou, thus causing the gains in these two cities,” said Chen Xiao, analyst at Beijing Zhuge House Hunter Information Technology, a property information and online services provider.

The property market in Shenzhen, often referred to as “China’s Silicon Valley”, has remained hot despite the coronavirus pandemic. In the January to August period, the prices of existing homes in the city surged 18.7 per cent year on year, while the prices of new homes gained 4.7 per cent, according to Zhuge. Transactions involving existing homes surged by 57.8 per cent, while those involving new homes declined 2.6 per cent. The demand for homes in Guangzhou and Huizhou is an outcome of some of Shenzhen’s strictest property curbs, which were introduced mid-July.

Much lower average housing prices in Huizhou and Guangzhou, which tend to see flatter growth compared with other megacities, has also buoyed the recent trend. In August, the average transaction in Shenzhen amounted to 52,240 yuan (US$7,725.1), compared with 13,028 yuan in Huizhou and 29,526 yuan in Guangzhou, according to Centaline Group.

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40 years of opening up and reform: How property became a driving force in the economy

The positive outlook enjoyed by the Greater Bay Area development zone has also influenced some purchases.