The Chinese government is considering policies to build a city cluster around Beijing. The policies have already pushed up property prices in the small towns around China’s capital city.
Gu An is a small town 50 kilometers from the center of Beijing, and just across a river that divides Beijing from Hebei Province. Gu An is also close to a second Beijing airport now under construction. The town’s location has made the local real estate market white hot. Local property agents say that real estate prices per square meter have risen to 8,000 yuan, up from 7,000 yuan at the end of last year. Eight thousand yuan per square meter is considered a bargain for many people in Beijing though analysts say the prices at Gu An might be just a bubble.
"This house price is basically overdrawn economies in the future. This includes Gu An’s industrial areas. We can see that the development of its real economy is behind that of the property market. The main risk is that the fluctuation of property prices in Baoding and Gu An is too big," said Du Bingguo, Director of Research Center, China Index Academy.
Still, Gu An real estate agents say that property prices will keep rising as Beijing continues to shift administrative branches, colleges, and wholesale markets to the region.