2010-04-02 07:33

GUANGZHOU - Despite repeated government warnings of overheating in the property market, prices in China's luxury residential sector are expected to continue to rocket.

A file photo of Dayi estate in Guangzhou, Guangdong province.?

Guangzhou Dayi estate, which ranked among the World Executive Group's list of the top 10 luxury residential properties in China, will have homes with starting prices of up to 60,000 yuan ($8,784) per square meter in the second half of this year.

The project, which is located at the base of the Baiyun Mountain in downtown Guangzhou, capital city of Guangdong province, will place 79 villas for sale, each of which will cost at least 54 million yuan, said Yuan Jinrong, assistant to the president of the Guangdong Zhongli Group.

The company acquired the land at a total cost of 500 million yuan in June 2005, which was the most expensive lot for real estate development at the time.

The value of the land has since risen five times that of its original bidding price of 3,300 yuan per sq m five years ago, according to Yuan.

While the price of properties at Guangzhou Dayi estate is out of the range of most buyers, it is not the highest in China. In the latest sale at Forbes Park estate in the Gubei area of Shanghai, a villa of 700 sq m was sold to an anonymous buyer at 190,000 yuan per sq m.

Although previous media reports said no more than 10 villas had been sold at Tomson Riviera, another luxury estate in Shanghai, where properties were put on the market in 2005 at what was then a record price of 100,000 yuan per sq m in 2005, Yuan has solid confidence in the luxury residential property market.

"There are too many big spenders chasing too few quality properties in the downtown area," he said.

Bryan Chan, director of the marketing and project advisory department of the real estate company Colliers International North Asia, said the residential sales market in Guangzhou will remain stable, particularly in the luxury sector.

"Investors still favor high-end residential properties to achieve higher returns," he said.

There is, nevertheless, likely to be a downward pressure on prices with fewer transactions expected in the second half of this year, he added.

CHINA DAILY