China’s property boom spreads to poorer rural areas as fears grow of a debt time bomb
While property prices stagnate in the biggest cities, remote corners of the country are seeing double-digit growth – prompting many to run up hefty debts in the hope of jumping on the bandwagon
When Li Jing returned to her rural hometown in southeast China for the Lunar New Year in February she was shocked to find the house prices had shot by around 30 per cent compared with her visit a year earlier.
She left with the impression that all her relatives and old school friends were scrambling to borrow money to buy property in Wanan, a small town in Jiangxi province that is officially one of the poorest corners of China.
The boom in house prices in the southern megacity of Shenzhen, where she now works as a financial officer, has left property there beyond her reach.
So Li was persuaded by her sisters and cousins – who have bought flats in Wanan last year – that she should jump on the bandwagon by buying property there.
She is currently debating whether to buy a flat in the city, priced at 5,500 yuan (US$875) per square metre, the usual way of pricing property in China.
The overall 550,000 yuan price tag for the 100-square metre property would be a fraction of what she would pay for a similar flat in Shenzhen, but is still beyond the reach of many locals.
