A quarterly report shows that supplies of new luxury housing projects in Shanghai have leapt up in the third quarter, indicating an increasing pressure on the city's up-scale housing sector.
From July to September, 19 luxury projects, with per-square-meter prices over 15,000 yuan (US$1,814), hit the market, providing an additional supply of 175,400 square meters over the previous quarter, according to the report by DTZ Debenham Tie Leung Ltd, a professional real estate researcher.
Changning District takes the lead with four new projects, while Pudong and Putuo follow with three. Huangpu, Xuhui, Hongkou and Yangpu districts have two and Zhabei District has one.
Most of the new projects are high-priced, with nearly 80 percent between 7,000 yuan and 10,000 yuan per square meter and nearly one-tenth between 10,000 and 15,000 yuan per square meter. Twelve percent are priced over 15,000 yuan per square meter, and no houses sell for under 7,000 yuan per square meter.
The increase in supply indicates a new upward trend for the local housing market, industry insiders analyzed.
In the first-half of the year, when the government took various restrictive measures to curb the overheated growth of the property market, many developers suspended construction in order to assess the market.
From the second-half of the year, new policies such as the interest rate hike seem favorable for the housing market and developers have regained their confidence. Expectations of rapid growth have returned, the insiders noted.
Because of the increase in new housing units, DTZ also expects a new round of peak supply in the luxury housing rental market in 2005 and 2006.
Foreigners who study and work in Shanghai are the main customer base for the high-end housing rental market.
The occupancy rate in the third quarter climbed 1.22 percent to 91.12 percent and the average monthly rental has increased from the second quarter's US$12.2 per square meter to US$12.4, a rise of 1.7 percent.
(Shanghai Daily News November 3, 2004)
