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Luxury residential sales bounce back in 1st half

SHANGHAI'S luxury residential sales market has appeared to have recovered, with about 4,800 high-end homes sold in the past six months compared with about 5,500 for the whole of last year, world leading real estate services provider CB Richard Ellis said yesterday.

But in terms of supply, only 2,828 new homes costing more than 25,000 yuan (US$3,660) per square meter came onto the market, compared with last year's total of 10,646.

"We have noticed a shift in the demand side as Shanghainese, and those from other provinces, are making up an increasingly larger proportion of luxury residential buyers,'' said David Chen, senior director of CBRE residential China. "The country's rapid economic growth and comparatively less impact from the global financial crisis are major reasons for such a change.''

At present, about 80 percent of luxury home buyers in Shanghai are Chinese mainland residents, compared with 20 percent two years ago, said Danny Ma, director of CBRE research China.

Many local buyers seek to park their cash in real estate as a hedge against creeping inflation, the company said.

Research from Shanghai Uwin Real Estate Information Services Co also showed a similar trend. Sales of new homes costing more than 30,000 yuan per square meter rose 16 percent in the first half from a year earlier to 2,793 units.

For the second half of the year, Chen from CBRE said, a lot would depend on government policy. "It's a bit hard to make a prediction for the rest of the year at the moment,'' he said. "The biggest uncertainty should be future government policies, which will have a great impact on developers and the local market.''


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