Price of city's luxury flats skyrockets

(China Daily)
Updated: 2009-10-30 10:47

The price of luxury flats in Beijing has significantly risen in the third quarter, and analysts say costs will continue to increase.

After a sagging real estate market in the second half of last year, Beijing's luxury properties recovered quickly in the first half of the year and gained momentum in the third quarter.

The average price of a luxury flat - defined as a high-quality apartments with additional amenities - has reached 32,999 yuan ($4,800) per sq m in the third quarter, up 6.5 percent on the same period last year, according to a report by CB Richard Ellis Group, one of world's largest commercial real estate firms.

It was a 7.7 percent increase on the second quarter.

"Compared with Shanghai's luxury flats price, the price in Beijing is still cheaper," said Yin Baojun, general manager of CB Richard Ellis Group's Beijing branch.

In the third quarter, the average price of a luxury flat in Shanghai was 39,185 yuan per sq m, with the most expensive priced at more than 100,000 yuan per sq m.

"I think Beijing's price will continue to rise in the long run," Yin said.

"There were several factors that led to the price rise. First, China's economy is recovering from global financial crisis. Second, people are optimistic about the future and that boosts buyer confidence," Yin said.

"Third, when property investors joined in last quarter, they focused on high-end houses and left the market with ample money."

"What's more, people are worried about the future supply," Yin said, "Land resources within the Fourth Ring Road is limited and that helps lift the price, especially in some good locations, like CBD."

Tao Hongbing, president of SYS Win Brokerage, a Chinese property agent, said: "It's not normal to see Beijing's price lower than other similar cities, such as Rio de Janeiro in Brazil and Seoul in South Korea," Tao said. "The price will definitely continue rising."

Tao said Beijing's luxury flats are not only being bought by Beijingers, but also by people from other areas in China and across the world. "So the reason is quite simple - demand decides price," Tao said.

An Ningning, a sales girl from property agent Sino-Ocean Land, said there had been a lot of sales activity this year.

"The 180 sq m flats which started selling in September are now about 36,000 yuan per sq m, rising from 33,000 yuan per sq m last month," An said.

"I am about to buy a high-end flat in one to two years," said Ma Zheng, who just purchased a villa in Huairou district this July.

He bought the villa at a price of about 10,000 yuan per sq m and wants to buy another flat in central Beijing.