“The smog has gotten so bad that a baby of my relative is getting bronchitis three months after he was born,” he said.

“People from the northeast are rich and do not have to work. So they can afford to spend the winter in the south.”

He said Chinese from the northeast, which is historically referred as Manchuria, were everywhere in Sanya, the southernmost city of Hainan province, which is also often known as “China’s Hawaii”.

Xishuangbanna in a property boom as Beijing chokes on smog

To contain the price hikes, the Hainan government has issued new investment restrictions issued last month that prevents buyers from securing mortgages to buy third homes, and bans non-residents from buying second newly-built homes in the province.

In many parts of Haikou city, home buyers have to provide social security records of no less than two years in order to buy homes, to ensure that they are long term residents.

The prices have so far stabilised after requirements to purchase homes in the island became stricter, says property agents.

“The curb will cool the market. The number of transactions for new flats have fallen significantly,” said Yu Tao, general manager at Centaline’s Hainan province, “Home prices will return to reasonable level.”

Still, Chang Ping, the Haikou resident from Changchun said he had been helping family members with their search for apartments in the city.

“I am also working here now, so I am helping my family to check out apartments almost everyday,” he said.

“My whole family was here first. Then they brought more relatives from my uncle’s side and later from my grandfather’s side.”

He said his family had purchased a 70 sq ft unit on the western side of Haikou for 1 million yuan six months ago.

Haikou is also expanding development into the western side of the city, with the city government recently relocating to the newly repurposed core business district that was previously occupied by five-star beachfront hotels.

Binhai New World, a new apartment project, bumped its home prices from 11,000 yuan per sq m to 18,000 yuan per sq m in less than six months. Sunny Territorial Ocean, another project in the district, is also asking for 18,000 yuan per sq m.

Evergrande, Poly, Greenland and many other property juggernauts which have been promoting their respective large-scale property projects in the metropolitan area, are now doing so for various suburban town projects outside the city area where prices are rising, fueled by the buying restrictions imposed.

A seafront project by Evergrande, the Evergrande Royal Sea World, which is located over 65 kilometres from Haikou, is asking for 8,800 yuan per sq m, and targeting mainland buyers.

Some Haikou residents remain skeptical about the potential of the local home market, in light of the recent curbs to stem the capital inflows from out-of-province investors.

Li Wei, who is in his 30s, said, “Haikou only has a few million permanent residents despite all the tourists from the north. It’s hard to understand the current demand level.”

He said the average income of Hainan residents was relatively low and the locals would not be able to afford the soaring home prices.

State media reports have quoted the National Bureau of Statistics as saying that the average disposal income of each Hainan citizen is 28,453 yuan, which is below the national average of 33,616 yuan.

Li said, “The sharp rise in property prices was only spotted in the recent months. It really went through the roof from the end of last year to the beginning of this year.

“It is hitting a plateau now but I think it could rise again come winter, when people are coming to Hainan to escape the smog,” he said.

But Chang said he did not expect home prices to fall anytime soon because the demand coming from the north is still gaining momentum.