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By Lusha Zhang and Ryan Woo
XISHUANGBANNA, China (Reuters) – A bus stopped in a rainforest not far from the border between China and Myanmar, bringing about thirty investors in a tour of properties, some with children.
Their goal: to pick one of the most fashionable real estate in China.
Hostesses led visitors along a winding path surrounded by frangipani, palm and banana trees. A stone bodhisattva in the lotus position announced his arrival at the show.
One of the investors was already in video chat to try to convince a friend to accept. Another also praised the healing powers of the temperate climate of Xishuangbanna. Others have commented that the summer break would be a great time to benefit from discounts.
Yunnan Province's hill town has seen a 40% rise in new house prices in June compared with a year ago, ranking fifth among China's 338 largest cities, according to the city's supplier. data on private properties Qingdao Cityre Estate Data.
With its amber sunsets, clean air and flattering name, Xishuangbanna is seen as a kind of new Shangri-la for real estate investors – and as a respite from the ruined markets elsewhere in China.
Real estate in the cities of the east and south is subject to a foreclosure policy that has prevented big price increases since 2017. Central China slows after reaching dizzying heights, while the north and the west, sparsely populated, attract only the most reckless speculators.
But Xishuangbanna, thousands of kilometers from Beijing and Shanghai, fills many boxes for for-profit investors. Besides the lush landscapes, there are few restrictions on buying homes.
And for the price of a bathroom in Beijing or Shenzhen, investors can buy an apartment overlooking the Lancang River.
Ma Mao, a 40-year-old businessman from Shanxi, is one of the many real estate investors settled in Xishuangbanna.
"I bought houses in 2017 when I arrived here for 4,000 yuan (£ 465) per square meter and the prices have now exceeded 10,000 yuan," said Ma, who moved with his wife and his three children two years ago. He now runs a real estate agency.
Renowned promoters such as Ping An Real Estate Co, Dalian Wanda Group and Sunac China Holdings Ltd <1918.HK>and Agile Group Holdings <3383.HK> all rushed to build houses there.
The skyline of the city along the Lancang, known as the Mekong in its lower course, is lined with tall steel and glbad towers. Luxury villas built on wooden stilts extend far into the rainforest.
Many investors are also betting on Xishuangbanna's location in the Belt and Road network led by President Xi Jinping.
Located about 30 miles from China's borders with Myanmar and Laos, the city of one million people has everything to gain from increased trade and investment from and to Southeast Asia. Is.
The developers spared no effort to market the city. Posters in an exhibition hall of an Agile Property project showed a high-speed rail map and planned routes between Xishuangbanna and Bangkok (6 hours) and even Singapore (10 hours).
Real estate investors are also moving into other Yunnan cities such as Tengchong and Ruili. In the neighboring Guangxi Zhuang Autonomous Region, the port cities of Fangchenggang and Beihai are considered strategic places to buy because they are maritime nodes on the road and road network.
In January-April, home-based transactions in Yunnan and Guangxi grew by 13.9% and 9.8% respectively compared to the same period last year, placing them among the four China's top performers, according to provincial statistics.
OUTSIDEspeculators
Prices for new homes in Xishuangbanna averaged 11,300 yuan ($ 1,641) per square meter at the end of June, according to Cityre Estate Data, similar to prices in provincial capitals of central China.
Ma bought 240 units at the end of last year for more than 80 million yuan ($ 11.6 million). He plans to turn them into vacation suites this year for older vacationers.
"I sold my apartments in Shanxi at the end of 2017, when prices peaked, and I invested in Xishuangbanna at the same time as the market had not yet taken off" said Ma smiling.
Xishuangbanna really took off in mid-2018, becoming an alternative to Hainan, a seaside city of China, where harsh measures taken in April 2018 prevented non-residents from buying a home.
Li Keyi, a 28-year-old lawyer from Xiamen, said her parents were selling properties in the coastal city to invest in Nanning, Guangxi.
Other investors are so-called "old migratory birds" looking to spend winters in the south.
Li Shuhua, 53, who was visiting the property, went to Xishuangbanna after his trip to Turkey.
The native of Hebei had already bought a 108 square meter apartment as a seasonal holiday home, paying a total of 1.14 million yuan.
She had joined the tour to examine a project developed by Sunac on behalf of her younger sister, who never went to Xishuangbanna but whom Li persuaded to invest.
RETURNS
But this is not paradise. An Shanxi investor, nicknamed Yang, said that a mosquito was all that was needed to dissuade her from buying.
Yang's husband was bitten the second night of their visit and had a severe allergic reaction. There was no pharmacy open 24 hours near their hotel.
Like two other Shanxi couples during the tour, Yang and her husband canceled their investment plan in Xishuangbanna.
And some people who have already invested, like Ma, have had problems.
Ma said he and five of his friends had signed a 200 million yuan contract for 71 villas developed by Ping An Real Estate last year. He said that they had already paid 100 million yuan.
The project was due to be completed last month, but Ping An suspended construction for eight months and has only recently resumed work. The company did not comment on why the construction stopped.
Ma said the developer would not sign an official contract for 45 units purchased and would not reimburse the deposits. Ping An told Reuters that he had taken over some units because the buyers had not complied with the payment deadlines, a claim denied by Ma.
The project will be completed in April 2020, the company announced.
"It completely ruined my plan and put a huge strain on cash flow," Ma said.
(Report by Lusha Zhang and Ryan Woo, additional report by Beijing Newsroom, edited by Gerry Doyle)
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