Dongguan’s sizzling property price momentum set to continue as influx of hi-tech firms fuels demand for housing

Property prices in the city of 8.5 million rose 29 per cent last year, according to a housing index compiled by a research unit of the Chinese Academy of Social Sciences. Shenzhen ranked second with a 23 per cent increase, and Ningbo in eastern Zhejiang province came third, registering a 16 per cent gain.

Analysts expect the momentum to continue, citing higher land prices. “Property prices in Dongguan will for sure continue to rise in 2021,” said Li Xingwang, an analyst at Hopefluent Research Institute. “On the one hand, demand still exceeds supply. On the other hand, lots of land plots that were auctioned last year had pretty premiums and the gains in land prices will definitely affect home prices.”

The city sold 42 plots of land for 60 billion yuan (US$9.3 billion) in 2020, a 66 per cent jump from the previous year.

Home prices rose across China because of the unprecedented amount of liquidity unleashed by the central bank, but the surge in Dongguan has been backed by fundamentals.

Dongguan’s ambition to move up the value chain from churning out low-value added goods to a hi-tech manufacturing base has resulted in thousands of workers moving to the city, fuelling demand for property. Between 2017 and 2019, the city’s population grew by 200,000. The city officials plan to boost the population by another 27 per cent to 10.8 million by 2035.