Statistics

Luxury homes in demand

By Hu Yuanyuan (China Daily)
Updated: 2010-04-19 09:10

BEIJING - Beijing's high-end apartments show signs of warming-up in the first quarter after the gloom of the last year, evidenced by climbing sales prices and rents, major real estate service providers say.

Prices of Grade A apartments and high-end villas in Beijing increased rapidly in the first quarter, as falling supply drove their prices to 43,774 yuan and 33,542 yuan per sq m respectively, up 18 percent and 13.1 percent than the previous quarter, according to statistics from UK real estate service provider Savills.

A banner advertising a luxury property project is displayed in front of villas in Yichang, Central China's Hubei province. [Provided to China Daily]

There were only 485 of Grade A apartments and 72 high-end villas available in the first three months, down 67.1 percent and 52.9 percent quarter-on-quarter respectively, according to the Savills' report.

Though the municipal government reimposed policy restrictions on overseas residents' home purchase in Beijing, buyers from Hong Kong, Macao and Taiwan still account for a considerable proportion in the high-end residential market.

Around 20 percent buyers of Chang'an Avenue No 8, a luxury property with an average unit sales price at 80,000 yuan per sq m, came from Hong Kong and Macao, said Liang Xiulei, vice-president of China Aoyuan Property Group Limited, one of the shareholders of Chang'an Avenue No 8.

"Besides a decent investment return, they usually take such apartments as an important networking place," said Liang.

In March, the project sold out its 16 units with a total floor space of 5,431 sq m and a total transaction value of 309 million yuan, making it among the top three best sellers in high-end residential market.

Meanwhile, as multinational companies strengthen their expansion in China due to global economic recovery, the rent of high-end apartments also saw a slight increase in the first quarter.

According to Jones Lang LaSalle, rents of serviced apartments, luxury villas and luxury apartments in Beijing increased by 0.7 percent, 0.6 percent and 0.8 percent to 153, 106 and 87 yuan per sq m per month respectively.

Faced with growing demand, two serviced apartment projects - Palm Spring and Oakwood Residence - ended their leasing operations and started selling the apartments.

Rudy Zhang, general manager of Palm Springs Platinum Apartments, said cashing in on such a rosy market would bring shareholders higher returns and a quicker cash flow.

Though the annual rent return of the project could range from 4 to 5 percent, higher than the national average of below 3 percent, the sales price now exceeds 43,000 yuan per sq m.