Luxury home sales soar in Shanghai

Updated: 2015-08-08 03:28

By WANG YING in Shanghai(China Daily USA)

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In the first six months of 2015, Shanghai’s luxury property market observed a 155 percent surge in sales from a year ago, with the half-year transaction volumes exceeding 820,000 square meters, spurred by investment and the rising demand for better living conditions, according to experts.

A total of 820,000 square meters of high-end residential properties were traded at an average price of 70,144 yuan ($ 11,293) per sq m, representing a year-on-year rise of 7 percent. There were 4,429 brand new premium apartments — each carrying a price tag above 50,000 yuan per sq m — traded in Shanghai from January to June, according to Deovolente Realty Co Ltd.

Trading of luxury homes had started to pick up since the end of last year and it peaked during the second quarter of this year. In June alone, a record 1,398 high-end apartments were sold.

Another report from E-House (China) Holdings Ltd revealed that the growth of luxury apartment sales in major cities around China has been equally robust, with 2,685 units sold in the second quarter, representing a 444 percent year-on-year surge and an increase of 167 percent from the earlier quarter.

More than half of the 79 most expensive residential properties traded during the second quarter across the nation are located in Shanghai, and top of the list was the Tomson Riviera — a luxury property project located in Shanghai’s financial center of Lujiazui — which commands a rate of 194,000 yuan per sq m.

In Shanghai’s secondary market, as many as 21 luxury home units, each priced above 50 million yuan, changed hands from January to May. In 2014, only 20 such properties were traded throughout the whole year, according to data by Deovolente Realty.

Among those priced above 60,000 yuan per sq m and 10 million yuan in total, 448 units were sold, up 114.4 percent year-on-year, the highest in history, according to Shanghai Centaline Property Consultants.

Xie Jinlong, a researcher from E-House (China), said that various factors have contributed to the buying spree, such as lowered requirements for mortgage, supportive measures by the government and investment needs.

“The outstanding sales in the second quarter may not continue in the third, as most of the rigid demand has been released in advance,” said Ding Zuyu, executive president of E-House (China) Holdings Ltd, who nevertheless expects the luxury home market in first-tier cities to remain bullish the rest of the year as long as home prices remain steady.

Albert Lau, managing director of Savills China, noted that China’s economic growth is bottoming out during this period of economic restructuring, and property prices would enter a new growth circle after a few of years adjustment.

“Along with the rise of per capita income are new-generation homes that are more environmental friendly, having condensed rooms, and more human intelligence features,” said Lau on the trend of new homes.

Capitalizing on the market potential for the elite buyers, Shui On Development —the Shanghai-based property development company of Shui On Group — decided to launch a new phase of its Lakeville bespoke residences near the city’s Xintiandi district. Buyers of the property will be able to customize the design of their homes, the size of their rooms, the materials used for furniture as well as the human intelligence systems, according to Allen Taylor, general manager of product development and high-end residential sales at Shui On Development Ltd.

“In spite of the record amount of high-end residential deals reached so far this year, we realize that consumers’ requirements have still yet to be satisfied,” Taylor said, referring to the company’s decision to launch the bespoke residential development.