‘Deputy Political Center’ Rumor Heats Up Chinese City Baoding’s Property Market  · Global Voices
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A busy intersection in downtown Baoding, China. Photo taken June 6, 2006 by Flickr user Tim Riley. CC BY-NC-ND 2.0
Home sellers in Baoding, a small city only a hundred miles away from the capital city of Beijing, haven't been this busy for quite some time.
People from cities including neighboring Beijing and Tianjin, as well as Wenzhou, home to most of the country's speculative buyers, have been flocking to Baoding lately, scooping up houses and stirring up its long-stable property market.
Average prices of new homes in Baoding rose by 4.8 percent from the previous month, the highest monthly growth seen among all 288 cities monitored by China Real Estate Information Corporation (CRIC).
The sudden upturn in the city's property market came in line with a report saying the city in northern China’s Hebei Province has been named by the central government as its “Deputy Political Center”.
Caijing, one of the top business and financial magazines in China, quoted an unnamed source as saying that a “common understanding” has been reached among Beijing, Tianjin and Hebei. The three regions together form one of the country’s most important economic circles in northern China.
A week after the report came out, the Hebei provincial government announced a plan to prepare Baoding for hosting some public institutions or ministerial departments that would be relocated from Beijing.
The announcement sent a shockwave across the city’s property market, pushing up prices in what was called by locals as “unprecedented”.
Some apartments have seen their average prices jump to 8,700 yuan per meters squared (1,400 US dollars), compared with 5,000 yuan (800 US dollars) just a month ago, triggering worries about over-speculation.
Xie Lusheng, a former policy maker at the Hebei municipal government, accused some groups of plotting to make profits by causing panics among consumers.
The National Development and Reform Commission (NDRC), the country’s top economic planner, implicitly dismissed the Caijing report by saying that it has never heard of a plan to build a “Deputy Political Center”.
Some believe impacts of the recent rumor on the city's housing market would be temporary and limited since the concept of building an economic circle surrounding the capital city has been floating around for decades without leading to substantive moves.
Transactions remained tepid amid rallying prices as statistics by Centaline, a Hongkong-based real estate agency, showed a daily average of 40 houses sold in the city after the Caijing report started circulating.
Newspaper the Beijing News reported that it would take at least 40 months for the city to sell all its existing inventory of houses, so the current rally won't last long. It posted this message on its official account on Twitter-like Sina Weibo:
【保定楼市：突如其来的疯狂】“现在房价太乱了，把三年的价都涨了，”2日，保定本地人小王在电话里抱怨道，“本来保定房价根本不怎么涨，大家不着急买房，都是你们媒体和开发商一起炒的，现在都担心买不起房！”针对保定城区房价暴涨，多位业内人士都称“难以持续
Baoding property market: The sudden craziness. “Property prices are turbulent. Prices have been rising to what we'd expect three years from now,” a local Baoding resident with the surname Wang complained over the phone in April. “Property prices in Baoding have been stable, and we weren't in a hurry to buy property, but now due to the hype from the media and property developers, we are worried we won't be able to afford a house at all!” Many insiders have said the skyrocketing prices in Baoding are unsustainable.
Weibo user Chizhou Suren warned:
保定及周边房价暴涨，典型的投机疯狂，或许风暴来临前的最后疯狂！！！！欲让其毁灭，必先让其疯狂！！！
Property prices in Baoding and its surrounding areas have been skyrocketing, it's typical speculative craziness, or the final craziness before the storm!!!! Before you destroy it, you make a crazy scene first.
Yueying Shanhuwan complained:
呵呵，保定人民还没享受到福利，先承担买不起房的苦果了
Hehe, we in Baoding haven't benefitted from the move yet, but are now tasting the bitterness of not being able to afford a house.
Yingtou Xiaomao wrote:
当初看到保定的这个新闻时，我瞬间就想到了两年前海南所谓的“国际旅游岛”。这些噱头或曰风声，目测改变不了任何行政层面的东西，能实际留下的东西也就是房产泡沫而已。——事实上，我根本就怀疑这些东西都是房产商折腾出来的。
When I first saw the news about Baoding, I suddenly thought of the so-called “international tourism island” plan proposed for Hainan province two years ago. Such a stunt will not change anything at an administrative level, but what it will leave in the end is a property bubble—-In fact, I fundamentally doubt these things were planned by property developers.