Luxury home prices in the Chinese city of Shanghai are likely to grow in the second half of 2008, according to news reports in the Shanghai Daily newspaper and by real estate firm CB Richard Ellis. While the rest of the city is suffering from a slowing real estate market, the luxury sector looks to stay steady and even see some price increases, due in large part to a lack of land for new homes.
According to the most recent property report from CB Richard Ellis China, the average price of high end apartments in Shanghai grew by 28.8% for the 2nd quarter when compared to a year earlier, and the price for villas grew by 26.7%. The company predicts that prices for luxury apartments and villas will rise by as much as 6-8% for the second half of 2008.
Looking at the whole country, according to CBRE’s report, the central government’s macroeconomic controls and tightened credit policy are impacting the residential market, with many potential buyers adopting a wait-and-see attitude. Despite this, luxury apartment prices fell only slightly in Beijing and Tianjin, with prices in other major cities continuing to show increase, particularly in Shanghai.
The Eastern China retail market has performed quite well this year, with all four major cities – Shanghai, Hangzhou, Ningbo and Nanjing – recording healthy growth. Luxury apartments in the region witnessed accelerated growth in the period led by Shanghai’s 3.6% quarter on quarter growth in luxury apartment price.
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