Real estate prices in the Greater Bay Area city spiked highest in mainland China last year at 29 percent
As hi-tech firms flood into the Greater Bay Area city to set up operations, Dongguan is likely to experience further price increases from last year’s record-high home price gains in China, reported South China Morning Post.
According to a housing index by a research unit of the Chinese Academy of Social Sciences, property prices in Dongguan increased by 29 percent last year. Shenzhen stood at second place with a 23 percent rise, while Ningbo in eastern Zhejiang ranked third at 16 percent.
Li Xingwang, an analyst at Hopefluent Research Institute, said, “property prices in Dongguan will for sure continue to rise in 2021. On the one hand, demand still exceeds supply. On the other hand, lots of land plots that were auctioned last year had pretty premiums and the gains in land prices will definitely affect home prices.”
In 2020, the city sold 42 plots of land for RMB60 billion (USD9.3 billion), a 66 percent increase from 2019.
Dongguan’s ambitious goals of transforming into a hi-tech manufacturing base have migrated thousands of workers into the city, driving property demand. The city’s current population is at 8.5 million, but officials aim to boost this number to 10.8 million by 2035.
Among the big tech companies that relocated to the city is Huawei Technologies. In 2018, the company established R&D facilities, transferring more than 10,000 employees and a multitude of ancillary companies. Oppo and Vivo also followed by setting up R&D centres in the city.
Songshan Lake, where Huawei is situated, experienced home price increases at RMB50,000 (USD9,992) per square metre, while downtown is typically RMB30,000 (USD5,995) per square metre.
Meanwhile, speculative demand is also driving up prices, causing speculators to search for cheaper real estate that has the potential to rise. Dongguan’s development outlook and well-suited location near the first-tier bay area cities of Shenzhen and Guangzhou are adding to its charm.
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