▲ Potential Chinese investors learning about the properties on offer on Jeju at Raon Private Town. Photo courtesy Raon Private Town
Legend has it that Chinese Emperor Qin Shi Huang sent an envoy to Jeju looking for a mythical elixir rumored to grow on the island. Some 2,200 years later, 155 Chinese investors visited Jeju in April and, sure enough, were greeted with an emperor’s welcome upon their arrival.
Their motorcade was escorted by police vehicles to their destination and Governor Kim Tae Hwan even threw an unusual reception for the group to promote the island’s “investor-friendly” business environment.
It was not the legendary elixir, however, that the Chinese visitors were looking for this year. They went straight to Raon Private Town to examine the luxury second homes currently under construction. To the astonishment of many in the know, the Chinese investors signed contracts for a whopping 58 homes by the time they ended their two-night stay on Jeju, demonstrating the power of Chinese new money.
It was not the first time that Chinese investors had bought luxury second homes in Jeju en masse. In a special road show held for Chinese investors in Beijing on April 8, more than 150 buyers attended and consulted with eight developers from Jeju for their potential second homes on the island.
Luxury second homes in Jeju cost about 20,000 yuan (3.57 million won) per square meter currently, whereas comparable homes on Hainan Island, China’s equivalent of Jeju Island, easily fetch 30,000 yuan per square meter.
To promote home sales on Jeju, the provincial government grants permanent residency to any foreigner who buys a home here worth more than $500, 000 and shows a clean track record for five years after the purchase.
One Chinese home buyer who attended the Beijing road show was quoted by a local daily as saying that “compared to the $800,000 to $900,000 it took to buy permanent residency in Hong Kong, it is much cheaper in Jeju to get a green card.” He said two of his friends had already bought second homes on Jeju.
Wealthy Chinese have always feared that the Chinese government could turn back from a capitalistic economy at any time and resume the rigid socialist control of the past. Buying a second home on foreign soil has therefore been one of the most preferred insurance policies among wealthy Chinese against the sudden change of political tides on the mainland. Their top choices have been Hong Kong, Singapore or the United States until now, but Jeju seems to be rising fast as another feasible alternative.
Furthermore, the asking price of second homes on Hainan Island is rising fast as speculative investors from the main-land keep buying luxury properties. Lastly, it takes less than two hours to fly from Shanghai, Beijing and the other major cities of China to Jeju, whereas it takes more than four hours to get to Hainan from the mainland, making Jeju an increasingly less expensive and more accessible alternative to China’s own holiday destination.
Raon finished a second round of investor road shows on June 15, after which they sold 42 more homes to Chinese investors, taking the total to 100 with a sales amount of 49.6 billion won. The company plans to hold two more such road shows this year.
Only 2.9 percent of the 47 million Chinese who traveled overseas last year visited Korea, but the sale of this number of homes to Chinese investors may indicate a new trend and be just a tip of what could soon loom large in Jeju’s future.
So be prepared for a deluge of fresh Chinese money flooding the island soon — and the subsequent emergence of local industries serving the new rich coming from the factory of the world.
ⓒ Jeju Weekly 2009 (http://www.jejuweekly.com)
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