Shenzhen link with Zhongshan may lift real estate
Updated: 2014-12-23 07:20
By Chai Hua and Zhou mo in Shenzhen(HK Edition)
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Property prices in Zhongshan are expected to be given a boost on completion of a channel linking the Pearl River Delta city with Shenzhen.
Construction work on the channel is due to start next year and the project would reduce travel time between the two cities to just half an hour from the current three hours.
Experts say a new lifestyle - working in Shenzhen while living in Zhongshan - may be formed as a result of the improved transportation.
"Cooperation between Shenzhen and Zhongshan lies primarily in resource agglomeration. It's highly likely that a new city circle will be formed after the channel goes into operation," said Wei Dazhi, an economics professor at Shenzhen University.
Real estate industry insiders point out that the channel will spark a hot wave of property buying in Zhongshan among Shenzhen residents.
According to Jiajiashun Group, a Shenzhen-based property agency, residential-property prices in Zhongshan are now only one-fifth those of Shenzhen, while industrial and commercial land prices are even lower, or one-eighth of Shenzhen's.
"Zhongshan is on the low side in the property market. Therefore, it's very attractive to buyers who are unable to afford property in Shenzhen," said Li Gongzhen, general manager of Jiajiashun Group in Zhongshan.
"With the construction of the Shenzhen-Zhongshan channel, property prices in Zhongshan are expected to rise significantly. In light of the potential increase in real estate value, many Shenzhen investors may rush to Zhongshan to buy properties," he said.
"However, buying property in another city is an impetuous act that could cause financial losses," warned Xiao Xiaoping, general manager of Second-hand Housing Institute at Shenzhen-based Zhonglian Property Co Ltd. She urged investors to compare as many properties as possible and take into account their financial ability as well as facilities around the property they intend to purchase.
The last three years have seen a surge in the number of Shenzhen residents and investors snapping up properties in Huizhou following the opening of the Xiamen-Shenzhen high-speed rail. But, these investors have found it hard to sell their properties recently.
Industry sources said about 70 percent of real estate buyers in some districts in Huizhou, Dongguan and other surrounding cities are from Shenzhen.
"I bought a house for 5.2 million yuan ($836,208) three years ago, but I can't sell it even for 4 million yuan now," groaned Dai Xiaolin, who purchased a 275-square-meter seaside villa at Huiyang, eastern Huizhou, at 19,000 yuan per square meter. "I had intended to live there with my family, but we didn't because the transportation and facilities there are still inconvenient," he said.
According to statistics from Centaline Property, real estate prices along the eastern seaside of Shenzhen have remained at the same level for almost two years. Industry analysts say investors who want to sell their properties now may suffer a loss after paying taxes and commissions if they had bought them with mortgages.
Contact the writers at grace@chinadailyhk.com and sally@chinadailyhk.com
(HK Edition 12/23/2014 page8)