A model of apartments in Hangzhou, Sept. 2. (File photo/Xinhua)
Despite the government lowering restrictions to unprecedented levels, the high-end realty market has continued to boom while the low-end market flounders, according to the Chinese-language Global Entrepreneur magazine.
In the first seven months this year, 3,885 new houses priced at 5 million yuan (US$810,000) or above were sold in Beijing at an average price of 41,242 yuan/square meter (US$6,720), up 7.4% year-on-year. Furthermore, 232 houses priced 20 million yuan (US$3.3 million) or higher were bought, up 13.7% year-on-year. The average transaction price for new houses in the city, on the other hand, dropped 8.2% to 13,623 yuan/square meter (US$2,220).
China's housing market has been weighed down by an overwhelming number of residences against a tight credit policy. Fortunately, this has not deterred the purchasing power of those interested in the luxury house market. Buyers are able to fork over as much as 60% of their own funds in a purchase, compared with 35% for buyers at the medium- and low-end sectors.
Zheng Haiyian, analyst at Landz Estate, a luxury-housing broker, noted that with many municipal governments having eased the restriction on housing purchases, the overall housing market has picked up. Luxury housing, with limited supply, has retained a stable demand, according to the magazine.
Zhu Jia, chairman of Sun Real Estate in Beijing, said the most popular luxury houses are those featuring a high price/performance ratio and unique resources, on top of low carbon emissions, low environmental impact and a layout conducive to social gatherings. Price is a less sensitive issue for buyers in this segment, according to the report.
In general, the luxury housing market is stable and thwarts the price fluctuations normally damaging to the rest of the country's real estate.
