Following the implementation of the Hainan border closure policy, the real estate market did not see the expected “revaluation of worth” as predicted by the public. On the contrary, according to a local real estate agent in Hainan with over twenty years of experience, on the fifth day of the border closure, property prices across various regions of Hainan Island collapsed dramatically – prices were halved. Even Haikou, the capital of Hainan Province and the gateway to the free trade port, failed to be an exception. This demonstrates that the border closure not only failed to support property prices but also accelerated the downward trend of real estate prices.
On December 18, 2025, the Hainan Island border closure officially began with the aim of developing Hainan into an independent tariff-free trade port, promoting trade and investment liberalization, and high-level openness. While travel for passengers remains convenient (such as visa-free entry for 59 countries), the policy brings about red benefits for goods trade and enterprise taxation (such as expanded “zero tariffs”, tax exemptions for processing and value-added, and a 15% income tax for enterprises/individuals).
Recently, a video released by a local agent in Hainan has gone viral on social media, sparking attention. The agent, self-identified as “Lei Ge,” stated in the video that he has been working in real estate in Hainan for over twenty years. On the fifth day of the border closure in Hainan, the property prices became a big joke. He mentioned how from Haikou to Sanya, everyone could see how property prices had plummeted.
He highlighted that in Haikou, the most expensive area was the Guoxin Avenue, known as the CBD of Haikou. People used to think that Guoxin Avenue was the CBD, where prices were at least 25,000 RMB per square meter. Last year, they even thought it could hold at 18,000 RMB, but this year it dropped straight down to 12,000 RMB. Guoxin Avenue’s “Yuan Lu Wang Pin” project also dropped to around 16,000-17,000 RMB. New projects nearby also saw prices reduced to the same level, available for group purchases.
The CBD in Haikou is located in the city-level business center of Dayingshan District in Haikou City, planned for a commercial and office area along Guoxing Avenue covering approximately 61.5 hectares, positioned as a financial aggregation zone gathering core government and business resources and large-scale projects.
He mentioned that many people are asking him whether they should buy houses in the Jiangdong New Area on the west coast of Guanlan Lake in Haikou. He believed that ordinary people see the Jiangdong New Area as Hainan’s future and the gateway to the free trade port.
However, he thought that the Jiangdong area would experience the fastest decline in property prices in the future. For example, the popular Qian Jiang Yue project, which used to have a unit price of over 20,000 RMB, now offers first-floor homes priced at 13,900 RMB. The new building units are priced at 17,000 RMB. He remarked that normal floors could be sold at 12,000 RMB per square meter, indicating that those who bought properties at 20,000 RMB previously made a big mistake.
He lamented that even in the west coast, there are now units of more than 8,000 RMB per square meter, including large communities adjacent to school districts. Villas near the tax-free city in Haikou have decreased to around 10,000 RMB per square meter.
Last week, residential units in the town center of the old city of Haikou were selling for over 5,000 RMB per square meter, for new properties. He questioned how other new properties in the old city could be sold at that rate.
He pointed out that property prices in Wenchang, Hainan, suffered a more severe drop, with prices in the county town dropping to over 5,000 RMB per square meter. He mentioned that he has several properties in Wenchang County that have been on the market for two months and have not been sold.
He highlighted that even sea-view properties and industrial villas in Hainan were not spared from the drop in prices. Calculated by usage area, prices have dropped to 2,000-3,000 RMB per square meter. Last year, prices were at 6,000-7,000 RMB, which now appears to be a high point.
On December 18, 2025, the Hainan Free Trade Port officially launched the island-wide border closure operation. The so-called “Hainan border closure” refers to the establishment of a relatively independent customs supervision area within the island, implementing a different regulatory system for the flow of goods, capital, and other factors compared to the mainland.
Since the release of the 2020 “Overall Plan for the Construction of the Hainan Free Trade Port,” the “border closure operation” has been repeatedly emphasized as a key point in the construction of the Hainan free trade port. It has long been regarded as an important symbol of the release of institutional dividends. In recent years, the concept of “border closure” has been amplified by the market, being linked to expectations such as “entry of international capital” and “regional revaluation of worth” and becoming one of the important narratives supporting Hainan’s real estate market.
However, official documents clearly state that the border closure does not mean “island closure” and does not imply immediate free flow of personnel or capital. Relevant policies will be promoted in phases and in different areas.
Chengdu-based blogger “Xi Kang,” who has 125,000 followers, has also questioned the performance of the real estate market in Hainan after the border closure in a recent video. He mentioned that despite the claims of Hainan aiming to replace Hong Kong and surpass Singapore after the border closure, property prices dropped significantly, becoming the biggest joke.
He believed that the border closure did not fulfill the positive expectations but rather exhausted the positives. He compared it to stock trading, where the most valuable information is before its implementation. Once implemented, the reality sets in.
“Xi Kang” stated that he had lived in Hainan for three years in the past and now spends two to three months there every year, especially during winter with his mother. He claimed to have a good understanding of Hainan Island.
He pointed out that Hainan was one of the regions in the country that had the longest speculation cycle and highest expectations, and the real evaluation of population, industry, and real purchasing power began with the implementation of the border closure.
In his view, the border closure was a reckoning for Hainan’s real estate market. “Even compared to cities like Chengdu, Hainan’s real estate market is no longer competitive. It has truly collapsed, and this is just the beginning. It will only get worse from here, possibly worse than the rest of the country. With the infrastructure, population’s economic scale, development prospects, and its previous performance, it proves that while it seemed promising before, now it’s just a bubble bursting.”