Easing of curbs to drive luxury homes market
Updated: 2014-12-19 05:21
By Yang Ziman(HK Edition)
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A number of luxury residential projects with apartments costing more than 100,000 yuan ($16,080) per square meter will come on stream in Beijing next year, with curbs on high-end market prices being eased and the central bank's new housing loan policy driving demand, real estate experts said.
"China's middle-class population is growing despite the economic slowdown. They are the main customers of these high-end properties. In first-tier cities, land prices have remained high, pushing home prices even higher," said Zhang Dawei, chief analyst at Centaline Property Agency in Beijing. "Next year, the market for high-end housing will be quite promising."
Despite sluggish sales of mass residential projects this year, high-end projects in the capital have managed to achieve their sales targets or even beat expectations. Poly Hyde Park - a luxury project developed by Poly Real Estate Group - saw more than 100 apartments with a total value of 2.5 billion yuan sold on the first day of sales in September this year, said Niu Yi, the project's marketing chief. The unit price of the project was reported to be about 90,000 yuan per square meter.
The unit price, according to Niu, will probably exceed 100,000 yuan per square meter next year, given the current bullish trend.
"The overall performance of the mainland's real estate market will improve in 2015, with average prices rising by 5 to 7 percent by the end of next year," Nie Meisheng, former head of the China Real Estate Chamber of Commerce, told a recent forum held by Ping An Bank. "And, the performance of the high-end market will be better than average."
The cap on high-priced projects imposed by the government on property developers has been relaxed as many projects priced at more than 100,000 yuan per square meter hit the market.
In September, Glory Chateau, a high-end residential complex located in Yizhuang district in Beijing's southeastern suburbs, entered the market with unit prices of more than 118,000 yuan per square meter. La Vie, another villa compound developed by Sino-Ocean Land in northeastern Beijing, was marketed at 119,000 yuan per square meter in October. Another of the company's villa project, Ocean Palace, sold apartments worth a total of 500 million yuan on the first day of sales.
Chen Zhi, secretariat of the Beijing Real Estate Society, said that, based on the fact that Beijing's top-end luxury homes market has been stable and having achieved better performance than the overall market this year, the high-end market in 2015 is expected to see increases in both prices and supply.
According to statistics from Yahao Real Estate Selling and Consulting Solution Agency, the sales volume of the capital's super luxury housing market with flats costing more than 30 million yuan has stood at around 100 to 200 units in the past three years.
Moreover, 364 apartments at 63 high-end projects with pre-sale prices of more than 50,000 yuan per square meter were sold in October - an increase of 42 percent over the same period last year. The sales volume of these apartments reached 3.7 billion yuan - up 36 percent compared with the same period last year.
"In fact, demand in Beijing's high-end housing market has outstripped supply," said Gu Yunchang, deputy director of the expert panel on housing policies at the Ministry of Housing and Urban-Rural Development.
"The high-end market is ready to be absolved of the government's tight housing controls. Reducing the stock of high-end apartments has now become an important aspect of the real estate industry. The new housing mortgage policy announced by the People's Bank of China (PBOC) recently, which lowered down payments and credit costs, will attract people seeking better living conditions to the high-end sector," Gu said.
The statement on improving financial services for the residential housing market, jointly released by the PBOC and the China Banking Regulatory Commission in September, stipulates that the housing loan interest rate should be lowered to 70 percent of the benchmark loan interest rate. It also encourages banks to offer mortgage-backed security to increase supply housing loans.
Ren Qixin, deputy manager of Yahao, said the central bank's new housing loan policy, which will reduce the percentage of down payments in total housing cost plus interest on buyers, will encourage real estate developers to increase their promotion of high-end homes. "We are quite optimistic about the high-end market in 2015," Ren said.
(HK Edition 12/19/2014 page5)