Shanghai's luxury home sales boom as wealthy buyers flock to ‘safe haven' assets
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In the first half of this year, the mainland's financial capital led in transactions of premium homes, accounting for sales of 482 new homes priced above 50 million yuan (US$7 million), more than 80 per cent of the total across 30 cities, according to data compiled by China Real Estate Information Corporation (CRIC).
For homes priced above 30 million yuan, transactions in the city reached 1,096 units, accounting for 60 per cent of the 30-city total. Two other tier-one cities, Beijing and Shenzhen, followed with 12 per cent and 11 per cent, respectively, the research institute added.
Nationwide, sales of new homes priced above 50 million yuan jumped nearly 50 per cent from a year earlier to 591 units, while sales of lived-in units in the same price category increased 43 per cent to 173 in the same period, according to CRIC.
Property models are displayed at a real estate sales office in Shanghai. Photo: China News Service/VCG via Getty Images
The surge was underpinned by both demand and supply factors, analysts said. On the demand side, Shanghai's premium homes were emerging as a 'clear safe-haven asset, offering stability amid relatively high risks in other cities', said Lu Wenxi, an analyst at Centaline Property in Shanghai.
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'Given the scarcity of residential properties in the city centre and the solid fundamentals of the homes themselves, investing in premium homes makes sense from both a risk and value-appreciation perspective,' he added. 'After all, there aren't many options for those with capital to deploy.'
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