Labor Day weekend was a frantic time in Shenzhen as residents and buyers from Hong Kong snapped up property on the back of government incentives.

Three projects in the bustling Guangdong metropolis came on the market during the holiday break with the Grace Impression development in Pingshan New Area drawing thousands of potential buyers. Within three hours, one 620-unit complex was sold out.

"More than 1,400 units were sold in May and the trend has been continuing," a sales representative for the Grace Impression development said.

"On average, we sold more than 100 units every week in June," she added.

New residential developments in Shenzhen are springing up, fueled by voracious demand and rising prices. Up to 6,850 units from 12 projects went on the market last month, according to Shenzhen Centaline Research Center.

Sales in older property have also showed robust growth since the May holiday, with the number of transactions nearly tripling after the People's Bank of China relaxed mortgage requirements in March. Last month, second-hand home sales reached 15,730 units, surging 292 percent compared with the same period last year, official statistics showed.

"During ordinary times, we receive five to six customers a day. But over the Labor Day holiday, we had 15 to 16 on average," Hu Bo, an agent with the Jiajiashun Group, a property agency in Shenzhen, said.

Liu Zilong, a Jiajiashun agent covering the Longhua New Area, revealed that 90 percent of his customers were first-time buyers. "Business during the (Labor Day) holiday was much better than last year," Liu said.

Jiang Yuanyuan, 30, a media professional from Guangzhou, and her husband spent months studying the Shenzhen housing market. The newlyweds had been renting in the city but decided the time was right to get on the property ladder.

After looking a various apartments, they finally bought a 103 square meter flat in Futian for about 3.4 million yuan ($548,228) .

"Prices in Shenzhen have been climbing for the past few months," Jiang said. "I was worried that if we didn't buy now, the price would rise to a level totally out of our reach."

Yan Jian, a Shenzhen-based banker, also took the plunge - for a second time.

He paid off his mortgage last year on an 88 square meter apartment in the Bao'an district, which he bought in 2008. He has since splashed out on a second apartment.

"The new one is an investment," Yan said. "I will be able to rent it out at roughly 3,000 yuan per month."

Back in March, the central bank introduced new mortgage requirements, which allowed second-time buyers to put down as little as 30 percent on a second home if they paid off the mortgage on their first property.

"I only needed 300,000 yuan for a down payment on a 32 square meter unit that cost about 1 million yuan," Yan said. "I also took advantage of the extra discounts offered to those using public housing funds."

The mortgage policy has seen down payments for second-time buyers reduced to around 40 percent from up to 70 percent. Second-time buyers who use public housing funds have seen down payments cut to 30 percent from 60 percent.

Naturally, sales in older homes in Shenzhen have also climbed. In June, prices surged 8.59 percent month-on-month, according to a report by China Index Institute.

But the trend may not last. He Qianru, manager of the Midland Realty National Research Center, fears that an increase in supply of new property will dampen demand.

"Second-hand home prices are expected to be flat in the second quarter," she said.

Still, the booming market has attracted buyers from Hong Kong, a special administrative region of China.

"We received 50 percent more Hong Kong customers during May," Liu, the Jiajiashun agent for Longhua New Area, said. "They usually prefer apartments smaller than 100 square meters for investment purposes."

(China Daily 07/15/2015 page15)