Mario’s report is a handy overview of the market and the pricing in the various parts of town, and a rehearsal of the argument that surging demand for a place in the sun could keep local property prices rising for a good while to come.
But what’s with all of the frantic building, especially on second-tier sites set well back from the beach? Is it waving or drowning? It wasn’t so long ago that we were hearing predictions of widespread bankruptcies among Chinese property developers.
As this report from Caijing hast it, these risks have not gone away. Interestingly, one of the article’s examples is an Agile Property Holdings project worth 20 billion yuan just up the coast from Sanya City at Clearwater Bay.
Agile, the article claims, was unable to leverage financing for the deal and was forced to sell a project stake instead. It is now said to be under heavy pressure to accelerate the project by several years in order to deliver the return demanded by private equity investors and prevent these investors pulling out.
It’s a story with what sounds like a familiar ring to it. There’s an enormous amount of building going on in and around Sanya at the moment, and supply particularly of second-tier property is surging, but are all of these developers really that bullish about the Sanya property market in the near term or are they just trapped in a frantic race against their debts?