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High-end housing sales increase
By Cao Qian |
September 15, 2010, Wednesday
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Print Edition
Print Edition
THE effects of the central government's anti-speculation mortgage policies are beginning to wear off, reflected in rising sales of luxury and high-end housing in August and early September. Cao Qian reports.
Shanghai's luxury and high-end residential market has been gaining strength since August, along with an overall rebound in the housing sector. These reflect the diminishing effects of the central government's tightening policies to curb speculation.
First-week sales in September were also up.
In August, a total of 116 units of luxury homes each costing more than 10 million yuan (US$1.47 million) were sold across the city, compared with 66 units registered in July. The figures were released by China Real Estate Information Corp, a major real estate information, consulting and online services provider.
"No new supply in that category was released to the local market in August and no major price cuts were offered to attract buyers among those purchases," said Sky Xue, a CRIC analyst.
"That was a good indication of rebounding sentiment in the city's top-end residential market."
Starting in mid-April, China imposed its toughest measures to rein in housing speculation as the ever-growing bubble in the housing market is posing an increased threat to the economy. The bubble is mainly caused by abundant liquidity and lack of investment alternatives. Increased down payments and higher interest rates for second mortgages are required.
In the Shanghai market, there are 83 luxury residential projects available for sale, with unit prices likely to exceed 10 million yuan. Among them, 58 are villa developments and 25 are apartment projects. By price, 50 developments are tagged between 10 million yuan and 20 million yuan and 33 go for more than 20 million yuan per unit, CRIC statistics showed.
A similar rebound was discovered in the city's high-end housing market.
In Shanghai, 96,000 square meters of new homes (selling for more than 30,000 yuan per square meter) were sold last month, an increase of 110 percent from July, according to Shanghai Uwin Real Estate Information Services Co.
That compared with the 70 percent month-on-month increase for the city's overall new housing market. In August, sales of new homes, excluding those designated for relocated residents under urban redevelopment plans, jumped to 730,000 square meters from 430,000 square meters registered in July, Uwin reported.
In August, Wharf Xiyuan, a high-end residential development in northeastern New Jiangwan Town of Yangpu District, alone sold 87 apartments, or 16,949 square meters, with an average price of 43,702 yuan per square meter.
As a result of increased purchases of high-end housing, the city's average new home price climbed back to the 20,000-yuan-per-square-meter barrier in August after falling below the threshold for two months.
New home prices rose nearly 10 percent to 21,156 yuan per square meter in August, the third-highest in the city over the past 12 months, according to Uwin research.
The same scenario was also found in the city's existing home market as more real estate agents confirmed that many owners of luxury and high-end houses had already stopped offering discounts. Some started to raise their asking prices over the past month as buyers showed more interest.
Scarcely any price discounts were offered in most of the city's high-end residential communities. At some outstanding projects, prices climbed fairly quickly, according to Century 21 China Real Estate, operator of the city's second-largest real estate chain.
For instance, at Yanlord Town, a high-end project located in Lianyang area of Pudong and a development of Yanlord Group of Singapore, asking prices for 207-square-meter apartments jumped to 43,000 yuan to 55,000 yuan per square meter at the end of August, said Ye Wenbo, a Century 21 branch manager.
That compared to the average selling prices of between 41,000 yuan and 53,000 yuan per square meter at the beginning of August, he said.
Price increases were most notable in the luxury housing sector.
In the prime Xintiandi area of Luwan District, there were significant rises in asking prices for apartments at Lakeville developments by Hong Kong's Shui On Land.
Selling prices for small apartments of 91 square meters at the development already rose to as much as 120,000 yuan per square meter at the end of August, compared to around 110,000 yuan per square meter registered a couple of weeks ago.
For medium and large apartments - those of 108 and 154 square meters, respectively - an increase of around 5,000 yuan per square meter was also recorded during the same period, Century 21 data showed.
Home purchase deals worth more than 3 million yuan concluded at Shanghai Centaline Property Consultants Ltd rose 4 percent in August from a month earlier, according to the city's largest estate chain with more than 200 outlets.
"Comparatively speaking, wealthy buyers are more sensitive to economic gauges like CPI and they are always keen to seek safer assets such as luxury products to fight against inflation," said Jenny Wu, director of residential sales for east China operations at DTZ, an international real estate information services provider.
"Due to their strong purchasing power, they are much less vulnerable to the current tightening policies, which mainly include increased down payment and interest rates for second mortgages."
And the recovery seemed to continue in the first week of September.
The latest research by Centaline showed that sales of luxury homes citywide soared to 40 units, or 9,400 square meters, during the first week of this month. The number of units was up 74 percent and the total area rose 87 percent.
Shanghai's luxury and high-end residential market has been gaining strength since August, along with an overall rebound in the housing sector. These reflect the diminishing effects of the central government's tightening policies to curb speculation.
First-week sales in September were also up.
In August, a total of 116 units of luxury homes each costing more than 10 million yuan (US$1.47 million) were sold across the city, compared with 66 units registered in July. The figures were released by China Real Estate Information Corp, a major real estate information, consulting and online services provider.
"No new supply in that category was released to the local market in August and no major price cuts were offered to attract buyers among those purchases," said Sky Xue, a CRIC analyst.
"That was a good indication of rebounding sentiment in the city's top-end residential market."
Starting in mid-April, China imposed its toughest measures to rein in housing speculation as the ever-growing bubble in the housing market is posing an increased threat to the economy. The bubble is mainly caused by abundant liquidity and lack of investment alternatives. Increased down payments and higher interest rates for second mortgages are required.
In the Shanghai market, there are 83 luxury residential projects available for sale, with unit prices likely to exceed 10 million yuan. Among them, 58 are villa developments and 25 are apartment projects. By price, 50 developments are tagged between 10 million yuan and 20 million yuan and 33 go for more than 20 million yuan per unit, CRIC statistics showed.
A similar rebound was discovered in the city's high-end housing market.
In Shanghai, 96,000 square meters of new homes (selling for more than 30,000 yuan per square meter) were sold last month, an increase of 110 percent from July, according to Shanghai Uwin Real Estate Information Services Co.
That compared with the 70 percent month-on-month increase for the city's overall new housing market. In August, sales of new homes, excluding those designated for relocated residents under urban redevelopment plans, jumped to 730,000 square meters from 430,000 square meters registered in July, Uwin reported.
In August, Wharf Xiyuan, a high-end residential development in northeastern New Jiangwan Town of Yangpu District, alone sold 87 apartments, or 16,949 square meters, with an average price of 43,702 yuan per square meter.
As a result of increased purchases of high-end housing, the city's average new home price climbed back to the 20,000-yuan-per-square-meter barrier in August after falling below the threshold for two months.
New home prices rose nearly 10 percent to 21,156 yuan per square meter in August, the third-highest in the city over the past 12 months, according to Uwin research.
The same scenario was also found in the city's existing home market as more real estate agents confirmed that many owners of luxury and high-end houses had already stopped offering discounts. Some started to raise their asking prices over the past month as buyers showed more interest.
Scarcely any price discounts were offered in most of the city's high-end residential communities. At some outstanding projects, prices climbed fairly quickly, according to Century 21 China Real Estate, operator of the city's second-largest real estate chain.
For instance, at Yanlord Town, a high-end project located in Lianyang area of Pudong and a development of Yanlord Group of Singapore, asking prices for 207-square-meter apartments jumped to 43,000 yuan to 55,000 yuan per square meter at the end of August, said Ye Wenbo, a Century 21 branch manager.
That compared to the average selling prices of between 41,000 yuan and 53,000 yuan per square meter at the beginning of August, he said.
Price increases were most notable in the luxury housing sector.
In the prime Xintiandi area of Luwan District, there were significant rises in asking prices for apartments at Lakeville developments by Hong Kong's Shui On Land.
Selling prices for small apartments of 91 square meters at the development already rose to as much as 120,000 yuan per square meter at the end of August, compared to around 110,000 yuan per square meter registered a couple of weeks ago.
For medium and large apartments - those of 108 and 154 square meters, respectively - an increase of around 5,000 yuan per square meter was also recorded during the same period, Century 21 data showed.
Home purchase deals worth more than 3 million yuan concluded at Shanghai Centaline Property Consultants Ltd rose 4 percent in August from a month earlier, according to the city's largest estate chain with more than 200 outlets.
"Comparatively speaking, wealthy buyers are more sensitive to economic gauges like CPI and they are always keen to seek safer assets such as luxury products to fight against inflation," said Jenny Wu, director of residential sales for east China operations at DTZ, an international real estate information services provider.
"Due to their strong purchasing power, they are much less vulnerable to the current tightening policies, which mainly include increased down payment and interest rates for second mortgages."
And the recovery seemed to continue in the first week of September.
The latest research by Centaline showed that sales of luxury homes citywide soared to 40 units, or 9,400 square meters, during the first week of this month. The number of units was up 74 percent and the total area rose 87 percent.
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