Sanya Expat

What does Dubai have in common with Hainan Island, China?

Answer: China's infamous millionaire real estate speculators of Wenzhou. I was recently pointed to a juicy background story at India Times of global property speculation leading from Wenzhou across the globe to Dubai and then back to Hainan Island where just one month earlier, the Wenzhou gang descended upon this tropical island paradise in a well-timed frenzy of property speculation, even by fast-rising Chinese property market standards.

From the India Times Article:

Millionaires from the isolated coastal city of Wenzhou, a centre of Chinese private enterprise, have fanned out across China and overseas over the last decade in search of property that they buy, and often quickly resell at a profit.

They may collectively face about 1 billion yuan ($146.5 million) in losses as the Dubai real estate market contracts, the head of the Wenzhou SME Business Development and Promotion Association said on Wednesday.

This story broke back in December revealing that in fact it was Wenzhou native Hu Bin, chairman of Shanghai Zhong Zhou Group, who laid out $28 million to purchase one island of the World Islands project set for luxury development and now looking more like a desert mirage. Post Dubai crash, Wenzhou investors are looking for the bargains there once again. "Since the recession on real estate in Dubai, I've led three groups of investors to Dubai to investigate properties," said Chen Zhiyuan, the president of Wenzhou Chamber of Commerce in the United Arab Emirates. According to a February report in China Daily, "Wenzhou, China's private capital powerhouse in the southern province of Zhejiang, is among the richest areas in the country and the birthplace of self-made billionaires who are manufacturing clothes, shoes, and other small commodities like lighters."

Chart from a related article at Business Insider

In an effort to identify where else the Wenzhou investment groups may be targeting for their investment hoards, we dig deeper to find a recent yet poorly translated article at www.kinablog.com , where we find the following:

Read more »

Well, we know Hainan is leading this parade...not good for the health of China's ongoing development...once again the greedy gain for themselves at everyone else's expense...Cheers, Mario

This just in from the news wires....

(RTTNews) - China’s National Bureau of Statistics on Thursday announced that property prices in 70 major cities across the country were up 10.7% year-on-year in February, faster than the 9.5% increase in the previous month. Housing prices were up 13% year-on-year in February, faster than the 11.3% increase in January, the statistical office said. Property sales in the first two months of the year jumped 70.2% compared to the same period a year ago.

As indicated in this recent release, Hainan property prices went ballistic starting in January...locally it is also very clear that there are more than a handful of owners with their properties for sale to lock in profits....very wise from our point of view...Cheers, Mario

Home prices in Haikou, capital city of Hainan province, soared 31.8 percent year-on-year and 19.5 percent month-on-month in January 2010, reports Xinhua, citing data from the Haikou Investigation Team of the National Bureau of Statistics. The rate of increase accelerated by 21.9 percentage points compared to the previous month, setting a new record high.

In January, prices of previously-owned homes in Hainan province rose 29.5 percent year-on-year, while prices of newly-built homes rose 33 percent year-on-year or 19.1 percent month-on-month. Prices of newly-built normal residential homes rose 37.8 percent year-on-year or 20 percent month-on-month. Prices of high-end residential homes rose 29.3 percent year-on-year, while prices of high-end apartments rose 31.5 percent year-on-year or 17.5 percent month-on-month.

Those of us residing on Hainan Island, China, particularly in Sanya, can enjoy feeling a bit puffed up due to a mainstream media front page story out of Market Watch's Hong Kong bureau on property prices gone wild here. When property values double in price in less than two weeks it should make the front page news. Indeed, these price moves could make derivatives traders blush.

As the publisher of Sanya's Quarterly Real Estate Report, our research and history on the ground in Sanya since 2006 led us to predict near the end of 2009 that prices for ocean front properties would and should level off in the 15 to 30,000rmb per square meter range. That's US $200-$400 per square foot.

Well, we were wrong. Wrong because reasonable based on the past doesn't apply in today's economic environment, both globally and in China.

Next page - taking a closer look to gain some insight.

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......according to a very credible, longtime business and property owner in Haikou, when the sudden surge in property prices on Hainan took hold in the past three weeks, property values of new local oceanview apartments at the North Shore Beach area near the Sheraton Haikou shot up between 200 to 300% from 10,000rmb psqm to OFFER prices by eager buyers of 28,000rmb per square meter which are being summarily TURNED DOWN by property owners . UPDATE 2/5 - these wild prices increase are ONSITE CONFIRMED...I visited several properties in Haikou during the past two days...asking prices for seaview villas at Vanke's Business Club property moved from 25,000rmb psqm last month to 40,000rmb psqm this month; apartment prices from 10,000 to over 20,000rmb psqm...in the city' Guomao area....+ 15,000rmb sqm....Haikou?? NUTS boys 'n girls!!

On another note, I do have a new property listing for our readers and clients - this is a 200 MU property parcel now available on the dark side of the moon at only 2500rmb per sq meter, comparable to current prices in the Li Jiang Yunnan region. Prices are still reasonably low because that particular region of the moon is quite cold and undeveloped to date. However, showing a high level of foresight on such matters, each villa will have in floor solar heating to keep your toes warm whilst you are trying to catch your breath in the thin, dry air at such high altitude. I know you may be confused regarding things such as gravity and atmosphere and build quality. Its ok. Really.

Finally, it is rumored that groups of investors from Wenzhou are currently eyeing and about to snatch up this particular new project development. We also heard that Shanghai real estate veteran Sam Crispin is also moving quickly for his slice of the moon mu pie.

Deposits for PHASE II Moon MU

We are now also accepting refundable deposits of 100,000rmb per MU for the PHASE TWO development which sits on a separate parcel on a much more attractive mooncrater hillside with partial sunsets which we have set to begin construction just after Chinese New Year 2013. Prices on the PHASE II development will be announced at that time. But don't worry as we are quite certain the PHASE II asking prices will not go up as much as they have in the past three weeks in Haikou and Sanya, suggesting an outstanding investment opportunity on the horizon, um sorry, on the moon.

For further research we recommend you google keywords "china, haikou, sanya, moon, bubble?, property, investments, gambling, is there any air on the moon?"

Cheers, Mario

The January 29th edition of China Daily features a front page story on skyrocketing real estate prices here on Hainan Island. In the past month, prices here have been driven up from already too high prices an additional 30% in a orgiastic buying frenzy.

This recent development coincidentally occurs in an orchestrated asset dance as during the past month, the Chinese stock indexes began to decline while the Chinese government makes a special proclamation that Hainan will receive special attention and incentives to be developed into an international luxury level destination.

Furthermore, it needs to be understood that during the past year strategic decisions were made to take Hainan Island upmarket as a more exclusive, luxury level tropical island playground for the wealthy and privileged. St. Regis and MGM Grande will join the resort lineup at Yalong Bay. Shangri La, Fairmont and Starwood's Luxury Collection Malus will flagship the Haitang Bay development. Lu Hui Tou's Banyan Tree Villas and Intercontinental will be joined by Four Seasons alongside the peninsula's exclusive golf course and Ban Shan Ban Dao luxury apartment & villa development.

Next page: Where to put your money next?

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