According to the latest Greater China Property Market Report released by Knight Frank, during the Q2 of 2013, luxury residential market in Shanghai performed well, with both supply and sales volumes increasing significantly. On the other hand, luxury home supply and sales in Guangzhou dropped quarter on quarter as influenced by the Five New Measures.
Beijing
In the Q2 of 2013, residential sales plummeted due to overdrawn demand in the first quarter and the launch of Five New Measures in March. However, home prices grew a steady 2.6% quarter on quarter. Amid tough control policies, Thomas Lam, Director and Head of Research & Consultancy, Greater China, at Knight Frank says, luxury home prices may not rise sharply in the third quarter, but supply and sales are expected to increase.
Shanghai
Five New Measures had limited effect, as local details had yet to be clarified. The luxury market boomed in terms of both supply and demand. However, the growth of luxury home prices slowed to 0.1% from the previous quarter. Growth in rents of luxury homes also slowed, up only 0.4% quarter on quarter, while the occupancy rate rose 0.5% to 95.9%. Thomas expects the robust demand for luxury homes to continue and prices to see moderate growth.
Guangzhou
In the second quarter, new luxury home supply fell 10.4% and transactions plunged 56.6%, but the average price rose 4.2%. Along with the absorption of policy impact, sales could rebound 10% in the third quarter. New luxury home supply may further decline, due to tough control policies. This will lend support to prices, which could see a slight rise in the third quarter.