Luxury property sales in china heat up before cooling measures take effect
The firm’s latest quarterly Greater China Property Market report shows that sales of high-end property in Beijing increased in March, hitting a new two-year high despite it being a tradition off-season. Indeed, luxury residential supply dipped by 30 per cent compared to the previous quarter.
Luxury residential sales surged 46 per cent quarter on quarter in Guangzhuo, and rebounded to a new six-month high in Shanghai in March as well, adds the report. In the first quarter, new luxury home supply in Shanghai reached 234,000 sqm, a quarter-on-quarter increase of 67%. Newly launched projects included The Eight in Putuo District and The View in Hongkou District, providing 510 and 642 apartments respectively.
The only area to see sales dip was Hong Kong, where sales of luxury homes worth HK$10 million or above fell 17.8 per cent quarter on quarter. Luxury residential prices and rents grew merely by 1.1 per cent and 0.4 per cent quarter on quarter respectively.
The rise in activity was driven by the government’s reason announcement of the “Five New Measures”, explains Knight Frank.
“Due to tougher control policies to be execuated at end March, the [Beijing] market saw panic sentiment and transactions were accelerated, resulting in a rapid rise in transaction volume,” says the report.
“Both sellers and buyers [in Shanghai] rushed to close the deals before the implementation of the “Five New Measures”, so secondary home sales surged,” adds Knight Frank.
The government’s new restrictions are expected to cool the market down in 2013. Purchasing power therefore shifted to the commercial market in the first three months of the year, which is not subject to the same restrictions as home purchases, pushing up commercial prices and transaction volume. Meanwhile, the Grade-A office leasing market remained stable, with rents in Beijing, Shanghai and Guangzhou similar to those in the previous quarter, following continued growth over the past few years.