Cooling Property Market

On March 25, the provincial government of Hainan announced that it would reclaim vacant residential lots from real estate developers, showing the local government’s determination to dampen the housing frenzy. The real estate market has over the years absorbed half the investment in the tropical island, accounting for half of its tax income. Hainan has rolled out more than 20 stringent property curbs including home-buying restrictions since 2018 to counter rampant speculative investment. According to the National Bureau of Statistics, the real estate industry accounted for more than 35 percent of Hainan’s GDP growth in 2018, the highest in the country despite a drop from 46 percent in 2017. There is still time for Hainan to devote itself to the development of its natural resources and improve its tertiary industry and local infrastructure so it can remain at the forefront of the tourism sector.