XIONGAN NEW AREA, China—When the Chinese government announced plans earlier this month for a new megacity a two-hour drive south of Beijing, instant gold fever erupted.

Fan Yushou, a 36-year-old businessman from Chongqing, about 1,100 miles away, hopped in his car as soon as he heard about the plans and drove for 20 hours. Home prices in the area more than doubled in the days after the April 1 announcement. Local media reported one Beijinger arrived with a trunk full of cash to buy apartments.

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