New | 'Deputy seat of power' rumour sends Beijing flat buyers flocking to Baoding

Anxious property buyers flocked to Baoding, a city 150 kilometres southwest of Beijing, to snatch up apartments after local authorities said it was aiming to become a satellite settlement for China's capital, according to reports in the 21st Century Business Herald.

Transactions had spiked and prices of flats had soared by as much as 10 per cent over the past few days as investors, a majority of whom were from Beijing, arrived in droves to take part in a buying frenzy, Chinese media reported.

Two-bedroom units in some new developments turned out to be extremely popular and were soon sold out, thereported. One buyer from Beijing alone bought 20 units, according to Sui Ming, a local agent.

But some new owners were apparently eager to quickly cash in on their investment and were already seeking to sell the flats they had just purchased, according to local property dealers. This stoked fears of a market bubble as many potential buyers said the price had been pushed up “impossibly high” by speculators from out of town.

Yi Peng, a Beijing-based public policy researcher, said he wasn’t optimistic about Baoding’s prospects for taking over some of Beijing’s government institutions and firms, as the rumour had claimed.