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The real estate market in Hainan province is picking up steam as the December customs closure approaches. When the border control stops, China’s southernmost province will kick off independent customs operations within the framework of the free trade port and introduce a suite of tax incentives and preferential policies aimed at boosting trade and investment.
Over the recent eight-day holiday celebrating National Day and the Mid-Autumn Festival, major cities like Haikou and Sanya still attracted a flood of homebuyers despite a typhoon. Several housing projects experienced visits from more than 100 groups, with one development in Sanya, a popular tourist destination, reportedly welcoming over 800 groups.
Terms typically associated with a booming market, such as “sold out,” “price increases,” and “projects selling out within days of launch,” are now appearing in descriptions of Hainan’s property sector.
Between October 1 and October 7, new home sales floor space jumped 22% year-over-year, and sales value surged by 115%, according to data from the local housing and urban-rural development authority.
During the holiday period, sales from the top 15 residential projects in the region exceeded CNY 1.2 billion (around USD 177.2 million), reflecting a more than 9% increase from the previous year, according to industry analysis. Sanya contributed nearly half of these transactions, while Haikou accounted for around 40%.
Recovery signs had been evident even before the holidays. In the first eight months of the year, the total commercial housing area sold in the region slightly increased by 0.6% compared to the previous year, with total sales value rising 9.3%. Residential sales alone grew 17%, highlighting a positive trend.
One of the key drivers behind the swift rebound is the upcoming customs closure for the free trade port, expected in mid-December.
Post-closure, Hainan will implement more liberal tariff policies, including duty-free incentives for industries encouraged on the island, reduced corporate income tax rates for significant local companies, and lower personal income taxes for high-demand professionals. These new regulations aim to facilitate cross-border capital flows and attract talent.
The region’s economic backbone has long been built on tourism, real estate, and tropical agriculture. With the full deployment of free trade port policies following the customs shutdown, additional industries are anticipated to enter a new growth phase, which could further stimulate property demand.
The benefits of establishing the free trade port are expected to bolster the long-term investment appeal and intrinsic value of Hainan’s real estate market, according to Wang Lu, vice president of the local real estate association. He also noted that the effects of the customs closure on the housing market will be gradual, likely causing uneven momentum across the island.
In Haikou, the provincial capital, most homebuyers are residents. Only prime locations attract buyers from outside the region, and even with price cuts, less desirable areas struggle to sell units, according to a senior executive at one of China’s top ten developers.
In contrast, Sanya, a popular tourist city where over 90% of buyers are from outside the province and possess strong purchasing power, tends to see more decisive buying decisions once suitable properties are found. This dynamic has given Sanya’s real estate market a more significant boost compared to other cities.
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