According to the latest Greater China Property Market Report released by Knight Frank, during the fourth quarter of 2012, luxury residential market in major Mainland cities performed well, with both prices and rents rising steadily. Sales volumes in Beijing and Shanghai dropped from the heady highs of previous quarters, while developers in Shanghai and Guangzhou were active in launching new luxury homes, hoping to meet annual sales target.
Beijing
Prices of luxury homes in Beijing maintained a steady growth of 2.1% quarter on quarter. Meanwhile, monthly rents rose steadily by 2.5%. Thomas Lam, Director and Head of Research, Greater China at Knight Frank, expects, "Sales in Beijing will fall in the first quarter of 2013 as Chinese New Year is traditionally a slow season. However, due to the overall market recovery during 2012, home prices could continue to grow moderately with steady investment returns.”
Shanghai
During the fourth quarter of 2012, luxury prices in Shanghai grew for two consecutive quarters, increased 10.3% quarter on quarter, while the growth in luxury monthly rents slowed to 0.2%. Thomas says, as affected by the Chinese New Year holiday, luxury sales are expected to decline in the first quarter of 2013. Luxury homes in prime areas launched in the second half of 2012 were well favoured by buyers. Due to sustained demand in prime areas, luxury prices would maintain moderate growth in 2013.
Guangzhou
Since the second half of 2012, Guangzhou’s luxury property market has experienced a market upturn in both sales volume and prices. During the fourth quarter in 2012, luxury residential prices averaged RMB34,011 per sq m, increased 9.4% quarter on quarter, the biggest rise since 2011. Meanwhile, the average luxury residential monthly rent grew a further 0.5% from the previous quarter, the highest level of the past three years.
Thomas concludes “In light of the solid rebound during the second half of 2012, the market is set to recover further in 2013, with luxury prices rising 3% in the first quarter and about 10% over the year”.