China Property Market Sees Surge in Luxury Home Sales Following Stimulus Measures

Luxury Home Sales Surge

Sales of luxury homes jumped in the mainland Chinese cities of Shanghai and Shenzhen immediately after the historic stimulus package, with wealthy buyers snapping up some 360 flats totalling worth 20 billion yuan (US$2.85 billion) as buyers bet on a brighter economic outlook.

• Lakeville Phase 6, a residential project by Shun On Land in the heart of downtown Shanghai’s Huangpu district, sold all 108 flats launched, fetching some 12 billion yuan.
• At Auant, another luxury project in the city’s Xuhui district, buyers snapped up all 178 available flats – priced from 15 million yuan to 33 million yuan – within an hour.
• In Shenzhen, Arcadia Bay found buyers for nearly half of the 152 flats in the third phase, bringing in more than 2 billion yuan.

Stimulus Package Encourages Property Purchases

The People’s Bank of China recently encouraged lenders to cut mortgage rates by half a point and reduced the down payment for second homes from 25% to 15%. In total, around 150 million homeowners could save 150 billion yuan annually.

These measures aim to spur consumption and stimulate property sales. The strong performance in luxury homes reflects a rising sentiment among buyers.

Also, mainland China’s three biggest cities issued policies to relax home purchase restrictions. Guangzhou has lifted curbs for local and non-local residents, while Shanghai and Shenzhen eased restrictions for non-local purchasers.

With many affluent buyers poised to invest in premium homes in prime locations, the outlook for the property market remains positive as additional stimulus policies are anticipated.