(Yicai Global) April 16 -- The Chinese government’s recent approval of plans to turn the southern island province of Hainan into a free trade zone will generate more opportunities for the local cultural, tourism and property markets, says one of the country’s leading real estate service providers.
“There will be more opportunities to make further investments in Hainan, and the free trade zone will obviously improve the value of such cities and regions,” Yan Yuejin, research director at E-house China Research and Development Institute, told Yicai Global.
For Hainan, a predominantly export-oriented market, domestic demand does not account for a large proportion of revenues with tourists representing the focus of market players. Over the past few years, many property developers have noted the province’s favorable environmental situation and property heavyweights such as Sunac China Holdings Ltd. and Evergrande Real Estate Group Ltd. have been ever expanding their presence. Sunac, with sales of CNY12.7 billion (USD2.0 billion) in 2017, owns 14 Hainan-based property projects having entered the market one year earlier.
Several property developers have tapped into the Hainan market since plans to develop the province into an international tourism island were formally upgraded to national strategy-status, said Liu Shuguo, secretary-general of the real estate association of Sanya, Hainan’s main tourist hub, adding that players such as China Vanke Co., Dalian Wanda Group Co., Evergrande, Greenland Holdings Corp., Greentown China Holdings Ltd. and Sunac have posted healthy sales from local operations.
Hainan’s house prices surged in recent years. House prices in Sanya were CNY31,915 per square meter as of March this year, representing the island’s most expensive area. Prices in central Tunchang county were CNY6,440 per square meter, the lowest in the province. House prices in the northerly provincial capital of Haikou stood at CNY17,306 per square meter, while prices in Baoting and Lingshui, both adjacent to Sanya, topped CNY20,000 per square meter.
This year marks the 30th anniversary of the establishment of Hainan as a province and the building of a free trade port will increase resource development and thus business opportunities in the province, Yan said. It remains important that speculation is prevented, especially in the real estate industry, he added. The real estate market should be strictly regulated and speculative investments should be stopped, especially in key cities like Haikou, Boao and Sanya.
Editor: William Clegg