Migrants Abandon First-Tier, Will Companies Follow?

"Although my annual salary is more than 200,000 yuan, but still very difficult to buy a house in Beijing, Suzhou, just to have a good opportunity to work on the move in July last year we came." After six years of struggle in Beijing, Zhang (not his real name) and his wife eventually chose to leave and in early May of this year bought a house in Suzhou to fulfill their dream of home ownership.
Well Mr. Zhang, you were late!
In fact, Zhang bought late. Yi Ju Institute think tank Center data show that, Suzhou (excluding Kunshan, Taicang and other county-level cities) this year in January - April the average transaction price of new commodity housing was 16,969 yuan per square meter, compared to the year 2015, up 28.91 %.
In addition to driving out migrant workers, rising prices may finally drive out key businesses including Huawei:
Although Huawei has denied rumors of a move to Shenzhen, but also warns of the many local governments, housing prices "Breakaway" will drive away a lot of good business, it may ultimately be "penny wise, pound-foolish."
Governments are trying to slow the rise in land prices, which in some cities exceeds the price of finished homes. See: Flour More Expensive Than Bread: Second Tier Land Prices Soar 180 pc
Many local governments have realized that the blind pursuit of land financial disadvantages. Suzhou, 23, on the 24th consecutive day land on the right pieces of the house implementation of the auction price, making the final bid is too high because of two house lots unsold.

This mechanism is similar to the stock market "fuse" or the first time in the land transfer process, although you can curb appearance of land kings, there are loopholes. "Once developers have a 'life or death struggle' mentality, you can blindly increase the price, and finally touch the red line, resulting in a failed auction." A real estate industry sources told CBN reporter.

For example, Lot No. 41 23 auction proceeds to two minutes, there have been 93 bids, the final result of the auction failed to deal over the red line.

24th auction seems to be more rational. In the morning, after 27 round of the competition, the Suzhou Industrial Park in the beam real estate to total 83.14 million yuan competing in the Soviet Union to 2016-WG-29 plots floor price of 10,549 yuan / square meter, the premium rate of 45.5%, becoming the first successful transfer of the block "to limit."

"And a lot of housing prices, we are positioning the Yangtze River Delta, Suzhou thus become the fulcrum of our major cities, next to the land, we acquired a project, and the future can be linked together with land development, reduce marketing costs." the new real estate Liang Su Jian, head of the Southern regional company told CBN reporter.
HUAWEI Technologies Co. Ltd. said Monday that it has no plan to move its headquarters out of Shenzhen in response to rumors claiming the technology giant will ditch the city due to its soaring property prices and labor costs.

Huawei said in a statement on its official website that the rumors spread over the weekend are “not true.”

“Huawei has been setting up all kinds of branches and research institutions across China and even in overseas markets since a couple of years ago to better support the company’s global expansion,” said the statement. “During the process, it is a normal business practice to adjust the responsibility of different entities.”
Whatever their intentions, the door is open for them thanks to global expansion.

SCMP: Housing crisis in China’s ‘Silicon Valley’: Huawei, other hi-tech giants head for cheaper cities as rising costs deter talents
Shenzhen, the southern city known as China’s Silicon Valley, could be losing its lustre due to a housing affordability crisis much like the one that struck the American original.

Led by tech behemoth Huawei, talent, resources and money have been flowing out of Shenzhen to cheaper locations, in particularly Dongguan, about an hour’s drive north.

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