Fears of a property bubble in Baoding city

Plan is to build satellite towns to take pressure off of overstretched Beijing

Kuihua Hall, beside the Lotus Pond, in  Baoding Ancient Lotus Garden

Kuihua Hall, beside the Lotus Pond, in Baoding Ancient Lotus Garden

Tue, Apr 8, 2014, 01:00

It seemed like a good idea at the time. Local authorities said that Baoding, a city in Hebei province 150 kilometres south-west of Beijing, would become a satellite city of the capital.

Baoding city government made the announcement of a plan to set aside 34 districts of 115,000 hectares to receive branches of institutions and companies moved from Beijing. The move was aimed at garnering feedback, but instead it caused a property market spike and generated uncertainty among people fearful they will be forced out of the capital and into the provinces.

Local property dealers said new owners were already flipping their apartments, sparking fears of a property bubble.

Soon, property buyers forced out of the crowded market in Beijing were coming to Baoding to buy. Transactions spiked and the cost of flats rose sharply within days as the would-be investors arrived.

The Global Times newspaper said that in one week local housing prices increased 60 per cent from 5,000 yuan (€805) per square metre to 8,000 yuan (€939).

Universities, research centres and hospitals could be next to be moved out of the city. Other cities, such as Langfang, will also be prepared to receive the capital’s industries or other functions.

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