Info Malang Raya Its All About World News
Shanghai’s Luxury Home Market Outperforms National Trends
Shanghai has emerged as a standout in China’s real estate market, particularly for high-end properties. In the first half of this year, the city accounted for over 80% of transactions nationwide for homes priced above 50 million yuan (US$7 million). This trend highlights how wealthy buyers are turning to luxury real estate as a “safe haven” asset amid concerns about economic uncertainty and potential price fluctuations in other markets.
According to data compiled by China Real Estate Information Corporation (CRIC), Shanghai saw 482 new homes priced above 50 million yuan sold during the first six months of the year. This figure represents more than 80% of the total sales across 30 major cities. For homes priced above 30 million yuan, the city recorded 1,096 transactions, making up 60% of the national total. Beijing and Shenzhen followed with 12% and 11%, respectively.
The surge in luxury home sales is driven by both demand and supply factors. On the demand side, analysts suggest that premium homes in Shanghai are seen as stable investments, especially when compared to other cities where risks may be higher. Lu Wenxi, an analyst at Centaline Property in Shanghai, noted that the scarcity of residential properties in the city center, combined with the strong fundamentals of these homes, makes them an attractive option for investors.
“Given the limited availability of housing in the city center and the solid value of these properties, investing in premium homes makes sense from both a risk and appreciation perspective,” he said. “There aren’t many alternatives for those looking to deploy large amounts of capital.”
On the supply side, a policy change last June that removed the cap on land prices in Shanghai has also contributed to the sustained value of luxury properties. Developers are increasingly focusing on prime locations within core cities, as reflected in rising land premium rates in top-tier and strong tier-two cities.
Fitch Ratings’ Shi Lulu highlighted that new home sales in China are expected to decline by around 15% this year. However, she pointed out that premium projects in top-tier cities could provide ongoing support for the sector. Growth in the high-end segment may help cushion the impact of the broader slowdown in the property market.
Lu Wenxi added that Shanghai’s premium home prices are likely to continue rising. He explained that land in the city center is becoming scarce, and as a result, demolition and relocation efforts are increasing. These rising costs are further driving up housing price expectations.
Shanghai has been one of the few cities in China to resist a widespread decline in new home prices in June. This is significant as the country’s property slump enters its fifth year, despite government measures aimed at supporting the sector, which once accounted for a quarter of the nation’s GDP.
Nationwide, new home sales fell to 9.7 trillion yuan in 2024—less than half the level recorded in 2021, according to government data. The continued challenges in the real estate sector underscore the importance of high-end properties in maintaining stability and growth in certain markets.
As the demand for luxury homes persists, Shanghai’s real estate market remains a key indicator of investor confidence and economic resilience in China. With limited supply and rising costs, the city’s premium housing sector is poised for continued strength in the coming years.
