New Sanya property projects will satisfy demand, says Savills’ Robert Ritacca
With its consistently clean air and virtual year-round sunshine, beaches, golf courses and natural scenery, Sanya has long attracted people from north China
People from north China looking to escape the winter chill and/or urban smog have long sought out the Hainan Island resort city of Sanya as a holiday destination, says Robert Ritacca of Savills Research.
With its consistently clean air and virtual year-round sunshine, beaches, golf courses and natural scenery, it was an easy choice for those affluent enough to be able to buy a second home in Sanya.
Demand for property soared even higher in October 2016 when, amid fears of a bubble forming in Beijing and Shanghai, residential policy restrictions imposed in many tier 1 and tier 2 mainland cities sparked what Ritacca calls a “flight to opportunity”.
“Investors became aware that they could park their investment on the island of Hainan, freed from the restrictions now limiting their purchases in many other Chinese cities,” he says.
In the months that followed, the southern city ranked either first or third on Savills’ index of residential price appreciation. “There was a lot of hot money coming into Sanya,” recalls Ritacca, with many buying several properties.
We [at Savills] have 20 projects in front of us, and some are the most expensive developments ever seen on Sanya
Month-on-month price growth of 2.3 per cent in March forced the hand of local regulators, who imposed their own cooling measures.
From April, only those who have permanent resident status in Hainan can buy more than one new property. The rule applies to residential apartments, serviced apartments and property-based hotels, and other timeshare apartments.
Xinhua reports that buyers of unfinished apartments in the city will be prohibited from reselling them. Non-locals who have bought new finished homes can only resell them two years after obtaining the certificate of ownership. The restriction also applies to locals who have bought more than one apartment.
Hong Kong-based investors rarely buy property in Hainan, Ritacca says, adding that with the brakes now applied to mainland buyer activity, “prices have dropped already”.
Ritacca expects the slowdown to be a temporary one – Sanya’s inherent attraction remains. And a steady pipeline of new projects is set to meet that demand. “We [at Savills] have 20 projects in front of us, and some are the most expensive developments ever seen on Sanya.”
He adds that as long as the current restrictions remain in place, “I would expect Sanya prices to be stable and not exhibit any of the inflationary characteristics that were seen in the first four months of 2017.”
