The outlook for Jiangmen's housing market looks positive, buoyed by the loose buying restrictions, low-interest rate regime, high liquidity and ongoing economic recovery following the coronavirus outbreak. One economist expects prices in the 'minor' Greater Bay Area city to rise by about 5 per cent through year end.
"Jiangmen's housing market is gradually picking up," said Li Yujia, senior economist and assistant to officer at Guangdong Urban and Rural Planning and Design Institute, a policy advisory branch of the provincial housing regulator. "Last year, the city relaxed buying restrictions with a policy to attract talent."
He expects demand in the fourth quarter to further pick up, pointing out that the overall containment of the coronavirus outbreak in the mainland and ample liquidity in the market will boost prices by another 5 per cent by the year-end. Growth, however, may be capped due to record-high level of unsold stock, according to E-House China R&D Institute.
"The social security [payment] requirement [for buying a home for non-locals] is just half to one year," said Li. "It also has a talent [attraction] policy that gets around the buyer restriction. As long as one fits the industries needed in Jiangmen's development, there are no restrictions on buying homes."
Li added that Beijing's housing price cooling measures are only for controlling red-hot markets, with Jiangmen falling outside the category. Apart from curbs in Shenzhen and Dongguan, the housing markets in other Greater Bay Area cities, including Guangzhou are largely unrestricted.
Li pointed out that Jiangmen's home prices lag behind other cities because "after all, it is at the outer zone of the Greater Bay Area".
Yan Yuejin, research director at the E-House China, echoed the view that loose policies would boost Jiangmen's housing market.
"This city most clearly has the loosest policies in southern China and Greater Bay Area, from talent to buying restriction policies," said Yan. He added that although transactions and prices might increase, they will be capped because of high inventory levels and its marginalised status in the bay area.
Economist Li recommends buying homes in the core districts of Jianghai, Xinhui and Pengjiang as these areas have robust amenities. He however said that high unsold stock in the western districts of Enping and Kaiping are cause for worry.
Unsold new homes in Jiangmen in the first half of this year jumped 38.1 per cent year on year to a historic high of 69,377 units, according to data from Jiangmen Bureau of Housing and Urban and Rural Development. Based on average sales of 4,497 units per month last year, it would take around 15 months to sell inventory, higher than the usual six to 12 months.
Jiangmen's housing market, like its economy, is better than Zhaoqing but falls short of and attracts less capital than Zhuhai and Zhongshan, said Sunny Yu, director of Greater Bay Area project and development at Century 21. Even "the resort estates there are overshadowed by those in Zhongshan and Zhuhai".
The city's housing market relies on local user demand with little investment demand as it is relatively far from Hong Kong and Macau. In July, close to 5,500 new homes were sold. Prices were low at 8,200 yuan (US$1,180) per sq m, or about 800 yuan per sq ft.
Yu said that the transactions were lower compared to the 16,000 a month in Huizhou, noting that Jiangmin's growth prospects largely depend on migrant workers who cannot afford homes in Shenzhen and Zhuhai.
"As the economy recovers after the coronavirus outbreak, there may be some support [to the market] but there will not be a jump [in prices]," said Yu, adding that there is slim chance of speculation.
He said Jiangmen's long-term prospects look positive because it lies on the upcoming Shenzhen-Maoming Railway due to be completed in six years' time.
As for buying interest from Hongkongers, Jiangmen may not figure high on their agenda as there are other Greater Bay Area cities like Zhongshan and Foshan that are cheaper and have a higher investment potential, Yu said.
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