HONG KONG – Wednesday, June 13, 2018- As the government tries to rein in prices, Tough measures are to be taken to smooth down the property market in China’s resort island of Hainan, have put the brakes on a real estate boom and underscore the policy risks developers and investors face.
Home prices in Hainan also known for its resort-lined beaches, commuted as China’s second-fastest monthly price increase in April, spurred by Beijing’s commitment to promoting the island province as a tourism hub and free trade zone.
But according to the new measures in April, restriction to non-residents from buying homes on the island, where non-locals normally comprise about 80 percent of purchases, have caused the sales to plunge.
China has been losing controls across the country to rein in rocketing property prices, often fueled by speculators. The tough new measures in Hainan were introduced after the price increased up by more than 50 % in some developments areas after Beijing announced for the creation of the free trade zone in mid-April month.
Andy Lee, chief executive with Centaline South China, said, “A free trade zone provides good prospects to the long-term economy so our clients are very positive about it”. He also added, “The irony is, even though they are positive they can’t buy any properties”.
Property agents in the resort island are now closing down as they seek greener pastures in other provinces.
Li Xuelong, a Hainan property agent, said, “a number of colleagues had left the island in the past month, while many clients had canceled purchases after authorities introduced what they described as China’s “most stringent tightening measures”. He also added, “Many of my colleagues have moved to Guangxi and Yunnan to look for business opportunities”.