A general view shows a residential area of Pudong district in Shanghai, China April 4, 2017.
Highways were reported to be clogged and people were camping outside real estate agents' offices in the rush to buy property thought to be inside the Xiongan New Area, 100km south of Beijing in Hebei province.
Setting up the Xiong'an New Area aims to help the co-development of Beijing, Tianjin and Hebei.
News of the plan to develop Xiongan, announced on Saturday, sent bargain-hunters flocking to the area sprawled over 100 sq km (39 sq miles), and by Sunday, average prices of apartments in the region had nearly doubled.
Shares related to Xiongan New Area in Heibei Province, described as "a thousand-year project" by the government, was surged by daily limit in the past three consecutive trading days.
China will speed up the drafting of plans for building the new area, said He Lifeng, head of the National Development and Reform Commission (NDRC), highlighting "international standards", "Chinese characteristics", "reform" and "innovation" as key words in making the plan.
For investors, the new area will focus on environmental, transportation and industrial upgrades as a jumping off point for a broader effort, UBS Securities wrote in a research note. It houses Baiyangdian, which happens to be among the largest freshwater wetlands in northern China with over 140 lakes that cover an area of 360 square kilometers (139 square miles).
Regional planning should be systematic, Zhang said, with stronger land, real estate and population controls.
It is estimated that these newly developed areas are large enough to house as many as 3.4 billion people, or almost half of the world's population.
Establishing the Xiongan New Area is "a very important integral part" of measures to transfer non-capital functions out of Beijing, said He.
A number of wholesale markets in the city's central areas have been shut down or relocated, and some of Beijing's city administration will be moved out of the city center to the southeastern suburbs in Tongzhou, which is called Beijing's "subsidiary administrative center". The second covers 200 square kilometers and the third 2,000 square kilometers.