Property Futures

Real Estate News, Reviews and Investment

Luxury real estate booming in Shanghai

News: all the action at the Lujiazui waterfront. 

There are positive signs that luxury real-estate supply and demand trends in Shangai are strongly moving ahead. This intensely active real-estate market has been booming at such a colossal pace that authorities tried desperately in the earlier part of 2012 to curb its speed.  Despite these measures, the impetus is still strong.  


Luxury home supply

The supply of floor space in the Shanghai real-estate market is such that it has incessantly supplied living space needed by luxury home seekers. The supply appears to be endless and according to evidence, is expected to continue into the future.


Facts and figures

According to a Knight Frank consultancy report:

  • Home supply doubled to 140,000 square meters in Q4 of 2012 which means that supply was once only 70,000 square meters.
  • Prices continued to rise despite decreasing sales, which indicates that developers are confident and view any drop in sales as being temporary.
  • Sales of RMB100,000 per sq. meter homes have been up 13.8% which reinforces what has already been said.
  • Other real-estate developments in the market lend weight to this scintillating growth pattern.  The K. Wah Group and Youngor Property Development for example are to provide gross floor areas of 97,000 and 35,000 sq. meters respectively. The additional floor space will provide very attractive earnings not only for the developers or other developers as well.
  • Popularity of luxury residents developed in 2012 will dampen the volume of purchases of newly created floor space, but this will be a temporary situation.

Luxury home demand

Demand for luxury homes in this market has continued to rise and there are no signs that it will soon change.

Facts and figures

  • The average rent reached RMB 175.5 sq. meter per month and although this reflected only a slight increase of 0.2%, total earnings are significant given a 95.7% occupancy rate.
  • Because of this lucrative situation, landlords are offering more attractive terms to tenants who are feeling the pinch of the recovering global economy.
  • Demand for residents with monthly rent below RMB 20,000, have increased commencing from Q3 of 2012.

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