(ECNS) - Property investors are retreating from Beijing due to rising prices, less room for returns and stringent purchasing controls, Beijing Youth Daily reported.
Prices of new houses in Beijing's eastern Tongzhou District reached 50,000 yuan ($7,530) per square meter in August, a rise of 15 percent from March, followed by 40,000 yuan in suburban Daxing and Fangzhou districts.
Ren Qixin, deputy general manager of Yahao Real Estate Selling and Consulting Solution Agency, said a shortage of land supply in Beijing means a drop in future housing projects, providing momentum to price increases.
The squeeze on margins in Beijing's housing market is forcing speculative funds to flow to second-tier cities and regions with good tourism resources, such as Hainan and Yunnan.
A man surnamed Huang, who comes from Henan Province and has worked in Beijing for 20 years, gave up a plan to buy his third house as an investment in Daxing District due to an increase of one million yuan from March to now.
Huang used the money instead to buy a house in Henan's capital city of Zhengzhou, already earning profit of 3,000 yuan per square meter.
A woman in Beijing spent 2.3 million yuan in cash to buy a house in Dali, a popular tourist attraction in Yunnan Province. That money couldn't buy any house in Beijing.
Many Chinese second-tier cities impose fewer housing controls than Beijing. Cities like Nanjing, Suzhou and Xiamen have all seen housing prices skyrocket in the first half of this year after top cities cooled down the frenzied market.
Data showed that Beijing residents accounted for 30 percent of house sales in the island province of Hainan.
However, some cities are also introducing measures to control speculative funds from entering into the property market. Hefei City, the capital of Anhui Province, has already imposed controls, with similar moves planned for Wuxi in Jiangsu Province.
