According to a Bloomberg report this week citing statistics from Centaline Property Agency,
A two-year lending binge and the government’s plan to transform Hainan, in the South China Sea, into an international tourism destination helped fuel a 48 percent surge in Sanya’s home prices last year, making it the nation’s best-performing property market. As China in 2011 switched gears with policies such as increased deposit requirements designed to curb speculation, Sanya’s home prices have dropped 28 percent since last December.
While the rest of China hasn’t experienced a property collapse since people were given ownership of their previously state-owned homes in 1998, Hainan, part of about 200 islands that make up China’s smallest province with the same name, is in the midst of its second rout in 20 years.
Residential property prices in Sanya fell 28 percent in November from a record high of 32,020 yuan per square meter (10.76 square feet) last December, according to Centaline Property Agency Ltd., China’s biggest real-estate brokerage. Sales fell 52 percent in October to 36,600 square meters from last year, and more than 80 percent of buyers are not locals, the brokerage said.
Of course, much of this real estate was being marketed as vacation homes, rather than as primary residences, so when individuals are limited to only “one more home per family,” as is now the case in China, then selling second homes must be a pretty tough business.
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