Hefei becomes latest Chinese property hotspot, with sky-high prices being driven by record land costs and speculative out-of-town buyers
Investors rush to get into the market, ahead of possible restrictions on purchases by non-residents
Cash-rich investors are flocking to buy homes in Hefei, the capital of eastern China’s Anhui province, amid speculation the city may roll out measures to curb a surge in speculative non-local buyers which has pushed new home prices sky-high.
The city’s property sector is also suffering, like many in China, from spiralling prices being paid by developers for government land being sold by local authorities over the past year to increase revenue.
China’s property bubbles – already the cause of heartburn for city planners in Beijing, Shanghai and Guangzhou – are spreading to outlying, smaller population centres, where living costs and income levels are lower.
Hefei’s property prices rose 40.5 per cent in August from last year, the fastest pace among 70 Chinese cities monitored by the statistics bureau, second only to Zhengzhou. Compared with July, average prices rose 4.8 per cent.
That’s enough to earn Hefei a new moniker. Along with Nanjing, Xiamen and Suzhou, these cities are now called the “four little dragons” for setting records in property prices.
Most of the buyers driving up prices aren’t even local residents. As much as 60 per cent of Hefei’s real estate buyers are so called “out-of-towners”, according to an estimate by Ling Bin, a researcher at Hefei College.