Surprise, Hong Kong's next door neighbour Shenzhen is the priciest city in China
Shenzhen’s new home prices clock a 39 pc rise in 2015 to become nation’s most expensive, according to SouFun
Beijing and Shanghai have been toppled from their top-of-the-pyramid status in real estate by a seemingly unlikely candidate.
Shenzhen has stolen the crown as China’s most expensive housing market after a year of torrid price gains elevated the border city well above its tier-1 counterparts to the north.
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Average new home prices in the city jumped 39 per cent in 2015 to 42,591 yuan per square metre (HK$50,691), according to monthly index data released Friday by SouFun , which tracks prices in 100 mainland Chinese cities.
Shanghai fell to No 2 spot after a year in which new home prices rose 15 per cent to 36,935 yuan per sq m. Beijing paced slightly behind, ending the year with new homes selling at an average 34,981 yuan per sq m.
SouFun data indicates that Shenzhen technically overtook China’s two largest cities from June, holding its position at the top of the tables for six straight months.
In explaining the city’s transformation into the China’s priciest real estate market, analysts point to surging population growth and other changes to its economic structure.
“The population in Shenzhen has surged from roughly 18 million to 21 million in one to two years,” said Andy Lee, the Shenzhen-based chief executive of Centaline Propery Agency for Southern China.
“Many immigrants are coming to work for leading finance and internet companies headquartered in Shenzhen.”
Of late, Shenzhen has enjoyed the new economy glow, with the city dubbed “China’s Silicon Valley”, headquarters for about 10 per cent of new startups.
Premier Li Keqiang visited a entrepreneur community in Shenzhen last year to encourage entrepreneurship and innovation.
For example, it’s home to internet giant Tencent and Dajiang Innovation Technology, one of the world’s largest drone manufacturers.
Qianhai, a special economic zone inside Shenzhen, intended as a test bed for China’s yuan liberalisation and other financial reforms, has attracted many foreign banks and leading financial institutions in the past two years.
Meanwhile, a parcel of land in west Shenzhen fetched a record 80,000 yuan per sq m at auction in December, ranking as the most expensive nation-wide last year.
Centaline’s Lee cautions that Shenzhen’s sizzling property market will likely cool this year, forecasting price gains of around 5 to 10 per cent.
Nationwide new home prices in December rose 4.15 per cent from the same monthly period in 2014, according to SouFun.
The central government has loosened administrative controls on housing and cut interest rates six times since late 2014 in an effort to help the housing sector recover.