The municipality's property market is expected to maintain
strong momentum this year, according to a report by international
real estate consultancy Jones Lang LaSalle.
Demand for office and retail space remained robust last year,
with rents soaring and vacancy rates plummeting, the report
showed.
The vacancy rate for the municipality's office buildings has
dropped significantly recently, slumping from 6.22 percent in the
third quarter of last year to a record low of 2.63 percent in the
fourth quarter, while the average rent has risen steadily from 95
cents per square meter per day to 99 cents during the same
period.
Rental costs are expected to soar further this year, driven up
by insufficient new supply, the property firm said.
The vacancy rate for retail space declined from 11.27 percent in
the third quarter of last year to 8.99 percent in the fourth
quarter, with rents increasing from $4.65 per square meter per day
to $4.90 over the same period, according to the report.
"The positive sentiment continues in the new year and 2007 is
set to be another solid year for China's real estate market," the
report said.
Due to restrictions on foreign individual homebuyers, the
high-end residential segment, a considerable portion of which
targets overseas buyers, is expected to see a downturn in terms of
transaction volume this year, said Kenny Ho, head of research at
Jones Lang LaSalle's Shanghai office.
According to rules released last July, only foreigners who have
lived in China for at least one year are allowed to buy apartments
for self-use, a move designed to curb rising property prices.
"The transaction volume of luxury and high-end housing projects,
both new and second-hand, is likely to shrink this year," said
Ho.
"But their price is not expected to drop and will remain stable
as long as most of the buyers and investors remain optimistic about
the long-term prospects and capital is adequate in the market," he
said.
The vacancy rate for luxury and high-end residential property in
Shanghai reached 17 percent in the fourth quarter last year and is
projected to rise to 25 percent this year, according to property
consultancy Colliers International.
(China Daily January 10, 2007)