China’s smallest province – Hainan – became the first to defy the central government by declaring it has no intention to impose curbs on the property sector; “Our real estate market will fall apart if new cooling policies are implemented”

April 15, 2013 Leave a comment

Hainan throws cold water on home curbs

Monday, April 15, 2013

China’s smallest province – Hainan – became the first to defy the central government by declaring it has no intention to impose curbs on the property sector.

“Our real estate market will fall apart if new cooling policies are implemented,” a local official told Shanghai Xinmin Evening News yesterday.Property is a key industry in the southernmost province, accounting for 50 percent of its total tax revenue in 2002.

Concerns about another housing bubble were cast in Sanya – the largest city in Hainan and one of the most popular tourist destinations in China – in the 1990s when uncompleted housing projects lay empty as a result of excessive speculation in the real estate market.

From 2000, the sector rebounded and reached a new high in 2002 when new home prices rose more than ten times from a decade back. Housing prices peaked in 2007 and then tumbled the following year.

In March, the average sales price of homes in Sanya fell 2.65 percent from February to 23,033 yuan (HK$28,871) per square meter – still 50 percent higher than those in Guangzhou.

Wang Zhihong, head of the provincial housing and urban-development department told Economic Information Daily said property investment in Hainan is targeted to exceed 15 percent to 95.5 billion yuan this year from 2012. Sales volume of new houses is expected to stabilize with the level of 2012. GRACE CAO

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