Likely new curbs 'no big deal' for Shenzhen homes market
Updated: 2016-01-08 09:15
By Zhou Mo in Shenzhen(HK Edition)
Shenzhen's property market is expected to remain strong this year despite the economic slowdown and new purchasing restrictions likely to be imposed by the local government, according to property services provider Colliers International.
Average sales prices of residential units are expected to rise further albeit at a slower pace compared with 2015.
But, given that curbs enforced previously remain in place and the authorities may implement extra measures to restrain rapid price growth, the transacted area is expected to fall in 2016, Colliers said.
"Although Shenzhen's real-estate prices had gone up almost 40 percent year-on-year in 2015 to about 33,426 yuan ($5,070) per square meter, it's a normal reflection of its economic growth rate," said Ken Kan, deputy general manager of the Shenzhen office at Colliers International China.
"There's little possibility of prices falling in 2016," he said.
Last year's transaction volume surged by 65 percent to 6.7 million square meters, compared with a year earlier, involving 400,000 square meters almost every month.
The commercial property market also saw steady growth in Shenzhen in 2015. Average Grade-A office rents climbed 6.9 percent year-on-year to 215 yuan per square meter per month, ranking second behind Shanghai among mainland cities.
This was mainly attributed to strong demand, as well as annual rental adjustments at several mature projects, said Carlby Xie, head of research at Colliers International China.
"Beneficial policies, such as the launch of the China (Guangdong) Pilot Free Trade Zone and the Qianhai Shenzhen-Hong Kong Modern Cooperation Zone, will continue to attract more companies to the city," Xie predicted, adding that finance and related industries, professional services and information technology, are expected to be prominent.
Fifteen new commercial projects will be completed in 2016, offering a total office area of about 933,000 square meters and representing a 65-percent rise over new office supply in 2015.
The growth is expected to raise Shenzhen's average vacancy rate and lead to rental adjustments this year, with Futian district expecting a slight decrease in office rents. In Nanshan district, however, high building specifications and corresponding higher rents at several newly completed projects will support higher rental levels, Colliers said.
Xie rejected suggestions that the recent renminbi depreciation will spark a large outflow of capital and have a negative impact on property investment.
"Many institutions, developers and individuals have been investing in overseas property markets in the past two years for various reasons. For example, it's easier to obtain financing overseas. Therefore, the impact of renminbi depreciation on property investment will be minimal."
In contrast to Hong Kong, Shenzhen's retail industry was active in 2015. Demand for retail property remained strong as several domestic and international retailers entered the market or expanded their footprint in the city.
Colliers forecasts that Shenzhen's retail property market will continue to grow, supported by its rising GDP per capita, a large population and infrastructure improvement, including the opening of three new metro lines by the end of the year.
A view of residential buildings in Qianhai, Shenzhen. In contrast to Hong Kong, Shenzhen's retail property industry was active in 2015. Demand for retail property remained strong as several domestic and international retailers entered the market or expanded their footprint in the city. Parker Zheng / China Daily
(HK Edition 01/08/2016 page8)