Property

Pudong’s luxury homes market turns active

Pudong’s luxury homes market turns activeDespite the overall slowdown in the property market, luxury home market in Shanghai is gaining traction in recent months, with sales this year already doubled the total of last year. Sales of Shanghai’s luxury homes valued over RMB 100,000 (USD 16,053) per square meter totaled 107 deals in the first ten months, more than twice as much compared with only 46 deals in the whole of last year.

The recovery of buying sentiment in the luxury home market is largely driven by increasing supply and the booming economy, especially in Lujiazui, Pudong, the fastest growing area in Shanghai. Famous for its recognisable skylines and modern skyscrapers, the only finance and trade zone in China, has about 31.78 square km, housing more than 500 domestic and overseas financial companies. According to Government’s latest five-year plan, Pudong’s Gross Domestic Product in 2011 reached RMB 540 billion (USD 86 billion), and is expected to double to over RMB 1,000 billion (USD 160 billion) by 2016.

For homebuyers and investors, the promising future of Lujiazui has made the luxury homes in the area an attractive investment amid the uncertain outlook of the global economy. While home prices in the City are still struggling with all kinds of housing curbs and restrictions imposed by the Government, prices in Luijazui have increased steadily over the past 5 years on the back of its rapid development. Apartments in the area now cost an average of RMB 99,490 (USD 15,971) per square meter - 7 percent higher than that in 2011. In terms of sales, some newly- launched luxury projects in the area are wellreceived by the market. Among which, Ocean One, COFCO’s latest project situated in the riverside of Lujiazui, sold 29 apartments in the past six months at an average price of RMB 130,751 (USD 20,990) per square meter - the highest in the City. Sun Hung Kai’s Shanghai Arch also sold 27 apartments during the same period, for an average price of RMB 111,480 (USD17,896) per square meter.

Nestled in the only state-level financial zone in China and surrounded by large-scale developments such as the new Disney Land, the area enjoys a bright future prospect. With more foreign companies and financial institutions setting up offices or expanding in the area, the housing demand for luxury homes from expatriates and professionals will continue to support the market in the near future.