In China's Chongqing, high-rises buck property slowdown

The $4.8 billion Raffles City towers over Chongqing and is evidence that a slowdown in China's property market has not taken hold in Chongqing

Chongqing (China) (AFP) - In many Chinese cities, government restrictions have cooled formerly feverish property markets, but in the southwestern city of Chongqing, construction is booming and sales soaring as investors rush in.

The most audacious evidence is one of the newest additions to the city’s skyline, a mega project of eight futuristic high-rises, six of which are connected by a vertiginous skybridge.

The behemoth Raffles City Chongqing looms over a bend in the Jialing river, where its dark-green waters meet the muddy currents of the Yangtze.

The huge development, which will feature apartments, offices, a high-end shopping mall and three public transport hubs, will start opening in phases in mid-2019

The 73-storey towers, part of a project built at a cost of $4.8 billion, are unmistakeable proof that a slowdown which has seen sales slump nationwide has not taken hold in Chongqing.

In recent years, Beijing has banned capital flight, curbing investments in foreign projects like a luxury development built by Chinese developers in Malaysia.

And authorities have tightened regulations in the country’s main cities, requiring buyers to show proof of residence before purchasing homes.

Those rules have benefitted places like Chongqing, a key logistics staging point in China’s Belt and Road Initiative.

More than 31 million square metres of new homes were sold last year in the city and sales of new homes increased by two thirds in March

The city is China’s largest market in terms of area of residential apartments sold: some 31.23 million square metres (336 million square feet) of new homes were sold in 2018, with sales of new homes jumping 64.3 percent in March, compared to a 0.6 percent drop nationally.

And the sales came despite Chongqing’s economy losing steam after years of double-digit growth, with its gross domestic product growing just 5.3 percent in 2018 – well below the national pace.

With prices at Raffles City starting at $580,000 for a one-bedroom apartment, it is well out of reach for most of the city's local residents who earn $880 a month on average

The scale of construction has been so rapid that prices have begun to drop as supply stacks up, but the lower prices are helping attract buyers.

“Chongqing is now at a point where there is an abundance of supply and it’s in a phase of market correction,” said Andrew Deng, managing director for western China at property consultancy CBRE.

“It’s a buyer’s market and many are taking advantage of that,” he added.

Prices for a 98-square-metre one-bedroom unit at Raffles City starts at $4 million yuan ($580,000), and developers say three-quarters of the 775 residential units in three towers have been sold.

Six of the towers at Raffles City are joined together by a 300-metre 'conservatory'

Potential buyers reportedly including diplomatic missions, as well as tech and finance firms.

But for many locals, whose average monthly salary in 2016 was 6,100 yuan ($880), properties like Raffles City represent another out-of-reach part of the cityscape.

“I suppose there will be some influence on the housing price nearby, which will probably go up,” said local Wang Mingjun.

He noted that traditional porters working the docks in the area had been cleared out during the property’s development

“Some people consider that it’s too modern and it will damage the traditional dock culture,” he added.