Daily Management Review

Chinese Buyers Seize Luxury Properties As "Hard Currency" In The Weak Real Estate Market


Chinese Buyers Seize Luxury Properties As "Hard Currency" In The Weak Real Estate Market
Luxury property is defying the downward trend in Shenzhen, a city in southern China where the real estate market has slowed, according to a report published on Monday by the official Securities Times. This is because wealthy buyers are looking for a haven in an unstable market.
604 units in a luxury development in the southern tech hub have been presold for up to 162,000 yuan ($23,087) per square meter, the report said.
Given that the units' sizes ranged up to 425 square meters, it is possible that some of them had values as high as $9.8 million.
The newspaper reported that in May, all of the units in a project with units costing at least 18 million yuan each were sold out on the day of the project's launch.
China's real estate market has experienced a sharp slowdown in recent months, with prices and sales both declining as a result of government intervention to reduce the excessive debt held by real estate developers, which resulted in a liquidity crisis and soured buyer sentiment.
The newspaper cited industry insiders as saying that new luxury homes are still popular with buyers who view them as "hard currency" in a weak real estate market.
Despite numerous stimulus measures implemented by more than 200 cities to pique buyers' interest, demand has remained weak, with property sales by floor area falling 48% year over year in August.
On the other hand, according to China Real Estate Information Corp (CRIC), an independent property consultancy service, the average selling price of luxury properties valued at 10 million yuan and above increased 11% from a year earlier in the first half of this year.