Tourism related real estate projects may cause crisis in China’s Yunnan

October 4, 2013 Leave a comment

Tourism related real estate projects may cause crisis in Yunnan

Staff Reporter

2013-10-03

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Models working for Country Garden, a property development company based in China’s Guangdong province. (Photo/CFP)

The potential tourism market in southwest China’s Yunnan province has attracted developers entering the local real estate market. However, the market is on the verge of a potential crisis as the government does not supervise the development of land, reports the Chinese-language China Real Estate News. Many market observers, for instance, have criticized the Century Golden Resources Group for constructing a five-star hotel, villas, a golf course, and a hot-spring resort, saying that the development was a huge waste of Yunnan’s unique natural resources.After finding success in Beijing, Century Golden Resources began to invest heavily in Yunnan’s Tengchong county in 2007, spending 8 billion yuan (US$1.3 billion) on a 6,200-acre plot of land. In November 2009, the company also began to build a holiday resort in Xishuangbanna Dai autonomous prefecture.

Second-tier developers are also eyeing the potential market in Yunnan. Figures showed that the total planned investment for the province’s tourism related real estate market is more than 2 trillion yuan (US$326.7 billion) as of September.

The local government’s plan to develop the tourism market created a significant opportunity for real estate developers, an insider said. However, government policies have focused on tourism development, leading to a series of problems as companies are developing land for tourism with no plans to construct facilities for leisure activities.

Meanwhile, some observers are concerned about Yunnan’s current push to expand its tourism sector, citing south China’s Hainan province as an example. Many leading developers poured a significant amount of money into Hainan when the concept of establishing it as an International Tourism Island was introduced. However, prosperity has brought many problems to the island, observers claim.

Wu Bihu, a professor at Peking University in Beijing, said the development of real estate in Hainan’s city is on the decline because developers are only focused on the construction of buildings and hotels and have ignored the relevance of vacation and travel seasons.

Filed under Macro Trends

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