At midnight on Thursday, the border gate between Macau and the neighbouring district of Hengqin will be open all day for the first time.
It is the moment that property developers in Zhuhai have been waiting for since the former Portuguese colony’s handover to China 15 years ago.
Hengqin has 106.5 square kilometres of land, three times that of Macau, and is just 180 meters across a narrow stretch of water at the closest point.
When the State Council designated it a special zone in April 2009, it had only several thousand residents, mostly farmers and fishermen.
Since then, development has moved at a blistering pace even by Chinese standards.
In early 2014, the world’s biggest marine theme park, the Chimelong Ocean Kingdom, opened on 132 hectares on its southern tip, with an investment of 20 billion yuan (US$3.22 billon).
In August this year, the University of Macau opened a new campus on the east of the district. The Zhuhai government is investing heavily in roads, water, gas and power supplies and, in the future, a railway line.
Niu Jing, director of the Hengqin New District Management Committee , said that by 2020, it will have a population of 200,000, one-third of them residents of Macau.
All this has created the optimum conditions for the property developers.
They have already benefited greatly – an apartment in the Jinxin Garden residential block that cost 2,000 yuan a square meter in 2003 is now selling for 26,000 yuan.
Units in Leechee Bay, which is under construction, are expected to sell for 40,000-50,000 yuan per square meter.
That is half the price of an average unit in Macau, which reached 106,341 patacas (US$13,313) per square meter in October, according to the Financial Services Bureau.
In an advertisement last week in the Zhuhai SEZ Daily, the developer described the bloc as “holiday for life”, with a photograph showing the view from an apartment of the Macau Tower and the New Lisboa casino.
Ahead of the Dec. 18 opening, the developers have been marketing their sites intensively in Macau and Hong Kong, with presentations and tours of their sites for potential buyers.
They are telling the visitors that cars with Macau number plates will soon be allowed to enter Hengqin – but not other districts of Zhuhai – without the need for Guangdong plates, making it even more convenient for Macau residents.
So is this the moment to buy?
For Hong Kong people, there are several reasons to buy. One is as a weekend or vacation home.
The 24-hour opening means that they can take a ferry to Taipa and then a taxi and be at their home within 30 minutes at any time of day or night.
The opening of the bridge from Hong Kong to Macau in 2016 will shorten the journey time.
The second reason is as an investment. If they believe Niu Jing and the developers, there will be strong demand for home in Hengqin from Macau residents.
They will be able to rent out units, with the income more than sufficient to cover the mortgage.
The third reason is confidence in the future of Hengqin as a tourism, business and leisure centre. The island has built an enormous exhibition and convention center.
According to the HNDMA, 6,500 companies have registered in the district with a total registered capital of 320 billion yuan.
But not everyone is so optimistic.
“I would not buy,” said Yang Honglin, the manager of a car company in Zhuhai. “The developers are creating this fever for buying and the local media is helping them. Do not believe what you read in the media.
“Zhuhai is full of empty apartments, cheaper than those in Hengqin. The number of jobs there now is limited and the ancillary facilities – shops, restaurants, schools and hospitals – are poor. Many of the developers are state-owned; they lobbied very hard for 24-hour opening,” he said.
Another question is real demand from Macau. It has 700,000 residents and is one of the most crowded places on earth.
Of them, 90,000 live in housing that is public or partly subsidised by the government.
Many live in their own homes, often inherited from their parents. So the number of those looking to buy for themselves is limited, as is their income.
In the third quarter of 2014, the average income of the 46,000 people who work in the hotel business – the biggest employer – was 15,750 patacas a month, according to official figures.
Guan Haijing, deputy president of Hengqin Huiji Investment Company, said that the main buyers in the district in the first phase would be Macau people.
“But its population is limited and some have bought already. At this stage, there will be a large supply of property. The sale of all these units will be difficult.”
And Macau residents have alternatives – they can buy in Gongbei or Xiangzhou, the areas of Zhuhai closest to the main border gate, whose opening hours are being extended as from tonight (midnight on Dec. 18) to 0600-0100.
These have the advantage of being fully developed, with all the urban facilities people need, and are cheaper than Hengqin.
Another issue is whether the Hengqin developers have all the documentation to sell units before completion.
Some are demanding a down payment of HK$150,000 (US$19,340) in exchange not for a pre-sale document but simply a piece of paper saying that they have paid the money – because they do not have the right to issue the pre-sale document.
Since 1999, Macau and Zhuhai have been in dispute over Hengqin.
Macau has argued that, with its dense population and shortage of land, it should be able to use the district as an adjunct to build industries and services for which it had no space.
Its only success in this was the University of Macau, an area of 1.1 square kilometer that is enclosed from the rest of Hengqin and under Macau law.
The Zhuhai government resisted. It knew it could raise far more revenue from sales of land and property if Hengqin was a special zone, similar to Pudong than if it were a part of Macau.
It took the intervention of the State Council to make the ruling in 2009. It designated the district as one for leisure, tourism, conventions and a complement to Macau.
Zhuhai won the battle in Beijing.
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