Agents abandon Hainan as home sales plunge in response to buying curbs

Source:Reuters-Global Times Published: 2018/6/13 21:33:40

Tough measures to cool the property market in China's resort island of Hainan have put the brakes on a real estate boom and underscored the policy risks developers and investors face as the government tries to rein in prices.

Home prices in South China's Hainan Province, known for its resort-lined beaches, recorded China's second-fastest monthly price increase in April, spurred by China's commitment to promote the island province as a tourism hub and free trade zone.

But new measures in April restricting non-residents from buying homes on the island, where non-locals usually represent about 80 percent of purchases, have caused sales to plunge.

Home transactions by area in Hainan fell 14 percent in May compared with April and were down 41 percent from a year earlier, according to the real estate research firm CRIC. Official home price data for May is due to be released on Friday.

The State Council is making plans to transform Hainan into China's largest free trade zone and upgrade its core industries to include not only tourism, but also modern services and high technology.

"A free trade zone provides good prospects to the long-term economy so our clients are very positive about it," said Andy Lee, chief executive with Centaline South China, a realtor. "The irony is, even though they are positive they can't buy any properties."

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."

Posted in: ECONOMY

blog comments powered by Disqus