According to the latest Greater China Property Market Report released by Knight Frank, in the first quarter of 2014, a wait-and-see atmosphere prevailed in the overall housing market in Mainland China. Luxury home prices held up during the quarter, but the price growth notably slowed.
Beijing
Beijing Luxury residential sales dropped about 20% quarter on quarter, due to tightened credit policies, less preferential interest rates and the low-season effect. Luxury residential prices stayed firm, but growth narrowed to 0.6%, the smallest gain since Q3 2012. In the luxury residential leasing sector, rent levels were flat, while the vacancy rate rose 2.3 percentage points to reach 13.6%.
Shanghai
Luxury residential sales in Shanghai declined, due to effects from the traditional low season during the Chinese New Year and credit tightening. Luxury residential prices edged up 0.8% quarter on quarter to RMB72,681 per sqm, driven by robust activity in some emerging luxury residential districts. Thomas Lam, Director and Head of Research & Consultancy, Greater China at Knight Frank expects transaction volume to rebound, while prices will continue to rise in the second quarter.
Guangzhou
In Guangzhou, luxury residential sales remained stable due to slightly loosened “restrictions on registration” and an absence of new supply. Since the government has not proposed any home-price regulation targets, no further stringent policies are expected this year. Nevertheless, the affordable housing units built in recent years will gradually affect market outlook. Coupled with market expectations on real estate registration and property taxes, housing prices are expected to grow less than 10% this year, significantly slower than in the previous two years.