Property value rises to over 10,000 yuan per sq meter after Games bid
Property prices in Chongli, a poverty-stricken county under the administration of Zhangjiakou, Hebei Province have skyrocketed in the past week after Zhangjiakou won the right to host the 2022 Winter Olympic Games together with Beijing.
"Property prices have generally risen in Chongli after Beijing announced its bid to host the Games in 2014. Prices in some communities have recently jumped from 4,988 yuan ($788) per square meter to 7, 988 yuan," a property agent surnamed Wei in Chongli told the Global Times on Tuesday.
The price of some serviced apartments has risen to 13,500 yuan per square meter from 6,000 yuan in 2010.
Chongli, one of the 10 poverty-stricken counties under Zhangjiakou, will host the biathlon, Nordic combined, ski jumping, snowboard and freestyle skiing events in the 2022 Winter Olympic Games.
"The Winter Olympics will be a good opportunity to improve Zhangjiakou's infrastructure, especially Chongli's, which can boost local property prices to a certain degree. But the increase in property prices should match local incomes," Li Jingguo, a property research fellow at the Chinese Academy of Social Sciences, told the Global Times.
The 2015 government work report of Zhangjiakou showed that the disposable income of urban and rural residents in Zhangjiakou was 21,651 yuan and 7,462 yuan, respectively, in 2014.
Chongli's annual revenue was 638 million yuan in 2013, with a GDP of 3.71 billion yuan and a population of 107,200 in agricultural areas, Beijing-based newspaper 21st Century Business Herald reported.
"About 95 percent of our customers are from other places, especially Beijing and Tianjin," a real estate agent surnamed Bai said, adding that some customers prefer to buy serviced apartments in winter, and most of them buy property for investment purposes.
More than 200 units in a building have been sold even before its developer has acquired a construction license or a licence to sell properties, Bai noted.
"A rise in home prices in Chongli is not sustainable. The current surge in prices is being fueled by the 2022 Winter Olympics. A sustainable real estate market is based on a growing population, which in turn depends on continuous migration into the city," Li said.
"However, not too many people will move to Chongli because it does not have much business and job opportunities," said Li, adding that people who buy houses in Chongli for investment purposes should be more careful.
Data released by the local government showed that real estate market in Zhangjiakou has slumped since 2012. Investment in real estate was 17.6 billion yuan in Zhangjiakou in 2014, down 5 percent from the previous year.
