Property market boom predicted for Greater Bay Area

The development of the Guangdong - Hong Kong - Macao Greater Bay Area is expected to support the area's residential property market, according to international real estate adviser Savills.

Population in the area, comprising nine cities in Guangdong province and Hong Kong and Macao Special Administrative Regions, is forecast to exceed 100 million by 2035 – up from 2017's 70 million, according to a Savills report.

Authorities will "support the development of the Greater Bay Area into an international demonstration zone for education" and "implement a more proactive, open and effective policy for bringing in talent", according to an area development plan released February.

Shenzhen, Guangzhou, Foshan and Zhongshan are the cities with most potential for increased populations, while Foshan, Dongguan and Huizhou are expected to benefit from a resulting investment demand overflow and higher urbanization, said the report.

Improved infrastructure is expected to encourage activity in Zhuhai's and Zhongshan's residential markets, both located to the western bank of the Pearl River estuary.

Infrastructure plans for the Greater Bay Area focus on connecting the mainland with Hong Kong and Macao, as well as connecting the east and west banks of the estuary.

The aim is "to build a rapid inter-city transport network mainly involving high-speed rails, inter-city railway links and high-grade motorways" and "reduce travel time between major cities within the Greater Bay Area to one hour or less".

Property development prices in areas adjacent to transport hubs are projected to grow by 20 percent in five years, said the Savills report.

Growth in the service industry meanwhile is forecast to create more demand for office space in the Greater Bay Area.

Guangzhou's and Shenzhen's service industries are projected to expand to 76 percent and 65 percent of the cities' GDP by 2023, said the Savills report, which said that "the digital economy should see rapid growth, and the development of modern service industries such as financial service should be expedited".

"We have seen the demand for high-grade office space, because clearly as the economy in the Greater Bay Area changes to more of a high-tech, innovative type of economy, there is demand for different working conditions," said Robert McKellar, Savills Asia-Pacific executive chairman.

Rapid service industry growth in Foshan, Zhongshan and Dongguan should increase demand for office space, while overseas investors are showing intensified interest in office properties in Guangzhou, Shenzhen and Foshan, said the Savills report.