Homepage
PR Newswire
12-09-2014, 12:29 PM
Shanghai High-End Residential Market Stable Despite HPRs
Sep 11, 2014
China’s central government has allowed local governments flexibility in the control of their housing market. However, Shanghai has not eased its restrictions. Local governments were allowed to ease restrictions which had dampened their local real estate markets, and the majority of lower-tier cities, have now relaxed or completely lifted home purchasing restriction. However, Shanghai has not changed its restrictions on home purchases, and has not given any signal that it intends to in the near future. Rumours of an easing in July 2014 were quickly rebutted by the government, which stated that “Shanghai has strictly implemented national real estate market policies, and has yet to consider any relaxations on such restrictions.” Against this backdrop, Shanghai’s high-end residential market has continued to post positive growth, and continues to attract investors.
After adjusting their sales price to meet government targets, developers of high-end projects have been allowed to launch new supply. In 4Q13, Shanghai introduced a further policy tightening known as the “Seven Measures”. One effect of this policy was stricter control of pre-sale permits for high-end residential projects, leading to delays at several developments. In July and August 2014 the supply of high-end residential projects increased. In August 2014 alone, six high-end projects (including Huangpu Wan in Huangpu District, Yulan Yuan in Pudong District, Ziyu Haoting in Putuo District, and Xiangyu Mingdi in Zhabei District), obtained the pre-sales permits.
Demand for high-end residential real estate has remained relatively stable in Shanghai. As a result, the transaction volume of high-end projects has risen, in contrast to a decline in mass-market housing. Between January and August 2014, the total sales volume of Shanghai’s housing market was 5,417,000 sqm (or 45,927 units), down approximately 29.7% y-o-y. During the same period, the sales volume of high-end residential property (defined as RMB40,000 psm or above) increased by 5.1% y-o-y to 964,000 sqm (or 5,696 units).
High-end housing now accounts for a higher proportion of Shanghai’s housing market, in turn pulling up Shanghai’s average housing price. The sales volume of mass market housing has fallen in 2014, as potential buyers take a wait-and-see attitude towards prices. The result has been that high-end housing now represents a higher proportion of the overall housing market. By August 2014, high-end housing accounted for 18.1% of Shanghai’s total sales volume (calculated by GFA), compared to 11.3% of total sales volume in August 2013. During the same period, the average sales price of high-end property has risen. In August 2014, the average sales price for high-end property grew by 2.9% y-o-y to RMB53,775 psm. Both of these factors have pulled up the average sales price for the entire housing market. Shanghai’s average sales price in August 2014 increased to RMB26,290 psm, up 11.6% y-o-y. Excluding the high-end residential market however, the sales price had grown by just 1.5% y-o-y, from RMB19,890 psm in August 2013 to RMB20,203 psm in August 2014.
Sales prices and sales volumes of both high-end villas and apartments increased, indicating confidence in different property types within the high-end category. Between January and August 2014, the total transaction volume of villas increased by 3.7% y-o-y; for apartments, this figure was 2.5% y-o-y. The average sales prices for the categories increased as well. The average sales price of villas increased by 4.3% y-o-y to RMB64,401 psm, while the average sales price of apartments increased by 1.4% y-o-y to RMB52,429 psm.
The prospects for growth in Shanghai’s high-end residential market are positive, even if no change in the housing restrictions is made. In 2Q14, both sales prices and transaction volume of Shanghai’s high-end housing market continued to grow on an annual basis, despite further restrictions on the city’s real estate market introduced in 4Q13. No change in this positive performance is expected for the coming quarters. In fact, a pickup in transaction volume is forecast, as six new projects obtained pre-sale permits in August 2014, amid the traditional sales season of “Golden September, Silver October”.
http://www.colliers.com/en-gb/china/abou...ial-market
Sep 11, 2014
China’s central government has allowed local governments flexibility in the control of their housing market. However, Shanghai has not eased its restrictions. Local governments were allowed to ease restrictions which had dampened their local real estate markets, and the majority of lower-tier cities, have now relaxed or completely lifted home purchasing restriction. However, Shanghai has not changed its restrictions on home purchases, and has not given any signal that it intends to in the near future. Rumours of an easing in July 2014 were quickly rebutted by the government, which stated that “Shanghai has strictly implemented national real estate market policies, and has yet to consider any relaxations on such restrictions.” Against this backdrop, Shanghai’s high-end residential market has continued to post positive growth, and continues to attract investors.
After adjusting their sales price to meet government targets, developers of high-end projects have been allowed to launch new supply. In 4Q13, Shanghai introduced a further policy tightening known as the “Seven Measures”. One effect of this policy was stricter control of pre-sale permits for high-end residential projects, leading to delays at several developments. In July and August 2014 the supply of high-end residential projects increased. In August 2014 alone, six high-end projects (including Huangpu Wan in Huangpu District, Yulan Yuan in Pudong District, Ziyu Haoting in Putuo District, and Xiangyu Mingdi in Zhabei District), obtained the pre-sales permits.
Demand for high-end residential real estate has remained relatively stable in Shanghai. As a result, the transaction volume of high-end projects has risen, in contrast to a decline in mass-market housing. Between January and August 2014, the total sales volume of Shanghai’s housing market was 5,417,000 sqm (or 45,927 units), down approximately 29.7% y-o-y. During the same period, the sales volume of high-end residential property (defined as RMB40,000 psm or above) increased by 5.1% y-o-y to 964,000 sqm (or 5,696 units).
High-end housing now accounts for a higher proportion of Shanghai’s housing market, in turn pulling up Shanghai’s average housing price. The sales volume of mass market housing has fallen in 2014, as potential buyers take a wait-and-see attitude towards prices. The result has been that high-end housing now represents a higher proportion of the overall housing market. By August 2014, high-end housing accounted for 18.1% of Shanghai’s total sales volume (calculated by GFA), compared to 11.3% of total sales volume in August 2013. During the same period, the average sales price of high-end property has risen. In August 2014, the average sales price for high-end property grew by 2.9% y-o-y to RMB53,775 psm. Both of these factors have pulled up the average sales price for the entire housing market. Shanghai’s average sales price in August 2014 increased to RMB26,290 psm, up 11.6% y-o-y. Excluding the high-end residential market however, the sales price had grown by just 1.5% y-o-y, from RMB19,890 psm in August 2013 to RMB20,203 psm in August 2014.
Sales prices and sales volumes of both high-end villas and apartments increased, indicating confidence in different property types within the high-end category. Between January and August 2014, the total transaction volume of villas increased by 3.7% y-o-y; for apartments, this figure was 2.5% y-o-y. The average sales prices for the categories increased as well. The average sales price of villas increased by 4.3% y-o-y to RMB64,401 psm, while the average sales price of apartments increased by 1.4% y-o-y to RMB52,429 psm.
The prospects for growth in Shanghai’s high-end residential market are positive, even if no change in the housing restrictions is made. In 2Q14, both sales prices and transaction volume of Shanghai’s high-end housing market continued to grow on an annual basis, despite further restrictions on the city’s real estate market introduced in 4Q13. No change in this positive performance is expected for the coming quarters. In fact, a pickup in transaction volume is forecast, as six new projects obtained pre-sale permits in August 2014, amid the traditional sales season of “Golden September, Silver October”.
http://www.colliers.com/en-gb/china/abou...ial-market
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.