Hainan property prices soar

The southern province of Hainan has seen property prices rocketing since the announcement of making the island a world class premium tourism destination.

What used to go for 3 thousand yuan a square meter now commands 10 to 20 thousand yuan. Transaction volume in just days has exceeded the total of 2008.

Several hundred people have been waiting since midnight to buy into a new project.

Some came directly from the airport.

Property Buyer, said, "We came here to queue up at 2 o'clock in the morning, after we just got off the plane. Of course I will buy. That's my only reason for coming."

Property Buyer, said, "Some property projects have climbed to 30 thousand yuan a square meter. I think the price of ten thousand yuan here has investment value. I expect it to rise to 15 thousand at least."

But most of these people waited for nothing. They were told that there were only 18 units left, although the project has over a hundred units. The developer says most were sold before the public sale took place.

Sales Manager, said, "Previously we planned to start selling today. However, yesterday the government required us to begin selling. So we informed some customers, and they signed purchase contracts with us and bought 70 percent of the units."

In fact, 94 units out of the 112 were sold before the announced public sale date. Most of the buyers are not from Hainan. Still, a local official says there is no bubble in the market.

Li Honghai, Director of Sanya Bureau of Housing 7 Construction, said, "There is no bubble in the market. The heat is simply because people are now rich. And they think Hainan is a good place. So they are willing to buy property here. In addition, most property buyers are pay the full amount of the property price. They don't borrow money from the bank."

Still, the local government is stepping to curb over-heated speculation. The Hainan provincial government says it has temporarily suspended land transfer and new property development projects. But the lack of supply is pushing prices even higher.