Zhuhai property market is underestimated, real estate agent says

Zhuhai’s real estate market has been underestimated and there is no room for the city’s housing prices to go down, according to Roy Ho, director of Centaline Macau Property Agency Limited.

A recent report that laid out 16 cities in China with the highest property risk profiles – known as “Red Flag Towns” – found that the neighboring city of Zhuhai was the third riskiest. The ranking was determined by the average loan-to-deposit ratio of property purchases, as of 2017 data.

According to the report, average property loans in Zhuhai reached about 140 percent of deposits in 2017 and were exceeded only by the property markets of Huai’an in Jiangsu Province and Xiamen in Fujian Province, which both exceeded 175 percent. With the exception of Hefei in Anhui Province, ranking fourth on the list just below Zhuhai, the next 12 cities all measured below 110 percent.

Contacted by the Times, Ho declined to comment on the abovementioned ranking of Zhuhai. However, he said that Zhuhai’s real estate market is worth more than its current valuation. “Zhuhai is a city [where] the real estate market is being underestimated,” he argued. “It’s not a city that has high housing prices.”

There is a growing interest in purchasing property in Zhuhai among Hong Kong and Macau residents. Residents from the two SARs account for 40 percent of the total number of buyers of projects in Zhuhai, while they constitute 60 percent of Hengqin property buyers, according to Ho.

“I will not say that Zhuhai’s housing prices will go up. But there is not much room for the price to decline either,” said Ho, adding that many people are paying close attention to Zhuhai.

When talking about people borrowing money to purchase properties in Zhuhai, Ho expressed that he does not think Zhuhai has a high rate of loans.

“It’s actually not high at all,” said Ho, explaining that “the house purchase restriction policy [in Zhuhai] restricts everything in a [strict] manner, regardless of the size of the property or whether the purchase involves a second property.”

“Loans are at most 50 percent [of one property’s total value]. Normally they are 30 percent or 40 percent if buyers are purchasing their first property. The first installment is normally paid with cash,” said Ho.

In Ho’s opinion, Zhuhai currently enjoys several favorable policies for the development of Hengqin, including its free trade zone.

“When these things [projects that benefit from favorable policies] become mature, [the Zhuhai real estate] market will probably change a lot. However, these projects are currently being carried out [and are not completed yet]. Now, [the Zhuhai real estate market] is only waiting for a critical moment,” Ho told the Times. JZ