Beijing's high-end residential market continues recovery

The high-end residential market in Beijing continued to recover with sustained supply and stable prices under the COVID-19 pandemic, industry statistics showed.

Data from the real estate service firm JLL showed that the sales volume for luxury apartments in the capital last year reached 1,934 units, down slightly (0.9 percent) from the 2019 figure when COVID-19 had no major impact on the annual total. Many developers also offered seasonal promotions and provided discounts, further driving sales at year-end.

In the fourth quarter, the sales spike came as 2,703 luxury apartments entered the market – up a remarkable 121.2 percent quarter-on-quarter, marking an eight-year quarterly high, while also pushing the full-year supply of luxury apartments up to an eight-year annual high, according to JLL.

As demand and sales recovery continued toward year-end, luxury apartment primary prices remained stable after returning to positive growth in the previous quarter. While many developers continued to unleash discounts to push more sales through at year-end, others actually increased prices as demand for their projects was strong.

Statistics from another international real estate service provider Savills also showed a similar trend. The sales volume of Chinese property market rebounded to the previous level at the end of the second quarter, and hit a new high in the second half of 2020. In Beijing, the total supply of new commercial residential buildings in 2020 reached 7.9 million square meters, while the area sold hit 7.175 million square meters, up 3.3 percent and 5.1 percent respectively year-on-year, according to international real estate service provider Savills.

Beijing had taken strong measures to recover the economy under the pandemic, said Anthony McQuade, the chairman of Savills North China. The establishment of the Beijing Free Trade Zone in September last year was expected to contribute more to development of the capital, which would bring new opportunity to the high-end real estate market in Beijing. This year also marked the beginning of the 14th Five-Year Plan, so new policies could also provide more favorable conditions.

Although both demand and sales volumes continued to rebound, luxury apartment price growth was expected to be restrained for much of 2021. As tighter policy aimed at better controlling debt in the housing sector, namely the "Three Red Lines", fully took effect at the start of 2021, developers remained under pressure, said Mi Yang, head of research for JLL North China.

Wang Hao and Huang Zexian contributed to this story.