Luxury home prices in Beijing and Shanghai up 15% each year
November 29, 2010 Category Real estate, Weekly
Shanghai and Beijing’s luxury home prices may increase 15% each year to overtake Hong Kong in the next five to 10 years, Joe Zhang, Deputy Head of China Investment Banking at UBS, said. Tightening measures would not stop prices from rising and might only delay the gains, he added. ”It doesn’t matter what the government is doing, whether we have 100 new measures or 10,000 new measures,” he said. “In the long term, all these are noises and will disappear, and only one variable matters – money supply.” Prices of luxury homes in Beijing and Shanghai, or the top 5% to 10% of each market, will continue to climb as values of mid- and low-end real estate were also rising, Zhang said. Residential home values in Hong Kong have jumped 52% since the beginning of 2009 and surpassed a 1997 peak, according to an index compiled by Centaline Property Agency. China is unlikely to introduce further property-specific measures as the government shifts its policy focus to controlling inflation, Citigroup said in a report. The average price of the top 30 luxury apartments in Beijing reached CNY57,561 a sq m in the third quarter, an increase of 7.1% over the previous quarter. The year-on-year growth hit 57.8%. Soaring inflation pressure is a major reason for surging property prices in the high-end residential sector, which is usually regarded as a good choice to hedge inflation risks, Grant Ji, Director of the Investment Department of Savills (Beijing) said.
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