SHENZHEN homebuyers have to pay an average of 20 percent more than locals for new homes in neighboring Dongguan, which is becoming popular with Shenzhen property speculators, Chinese-language newspapers reported yesterday.
New apartment buildings in Dongguan towns bordering Longgang and Bao an districts in Shenzhen, such as Fenggang and Tangxia, were most favored by Shenzhen homebuyers because they were within a 90-minute drive from downtown Shenzhen, the Shenzhen Economic Daily reported.
The prices were around 10 to 20 percent higher than estates in other parts of Dongguan, which were the same quality but targeted Dongguan buyers, the report said.
Dayunchengbang Real Estate in Fenggang Township in Dongguan was one of the estates closest to downtown Shenzhen. The price for first-phase apartments was 8,000 yuan (US$1,170) per square meter and the developer said the price for second-phase apartments would rise to more than 10,000 yuan.
New homes in Fenggang were priced at an average of 5,000 to 6,000 yuan, the report said.
Che Derui, a researcher with Dongguan Centaline Property Agency, said many Shenzhen home speculators were going to Dongguan, where home prices were much lower and were not subject to a purchase limit imposed in Shenzhen in October.
On Oct. 6, Shenzhen introduced a new rule capping the number of homes local residents can buy after the Central Government intensified efforts to curb property inflation.
The policy prohibits families with Shenzhen hukou from buying a third home and non-local taxpayers from buying any unit.
According to Che, luxury homes including expensive villas and small homes costing less than 200,000 yuan in Dongguan, were most favored by Shenzhen property investors.
To grab a share of the pie, Shenzhen developers had rushed to buy land in Dongguan land lots. In 2009, seven of the eight land lots sold by Dongguan governments were bought by Shenzhen developers. The area totaled 186,000 square meters, statistics released by the Dongguan land resources authorities showed.
But Che warned that investment in mid-range apartments in Dongguan might not be as profitable as many people expected.
Average housing prices in Dongguan increased 15 percent from 2009 to 2010, Che said. There is a large population of entrepreneurs and migrants there. Entrepreneurs favor luxury homes but migrants can not afford homes. Homes were also expensive for a small number of locals. (Vivian Li)
