Shanghai H2 luxury home sales set to grow

Shanghai's luxury housing market is likely to see a boost in the second half of this year because of abundant supply.

"Real estate developers, both long-established premium homebuilders and new entrants to the luxury segment, have been actively marketing their new projects over the past few weeks, indicating a confidence among the major players," said Sky Xue, an analyst with China Real Estate Information Corp, a leading property services provider in the country.

"The recent relaxation of home purchase restrictions in a growing number of cities, though not in first-tier cities, should leave a positive impact over the overall housing market while a rise in supply over the rest five months of this year would also trigger momentum," Xue said.

While the city's overall housing market recorded an over 40 percent drop in sales in the first six months of this year, the high-end segment did register a better performance.

The purchases of new homes costing 20,000 yuan ($3,241) or less per square meter dropped 49 percent in volume between January and June, while those with a price tag of more than 60,000 yuan a square meter fell 31 percent during the same period, international property advisor DTZ said.

Last weekend, China Vanke Co, the country's largest residential developer, followed Sun Hung Kai Properties, a Hong Kong developer renowned for its expertise in developing premium homes, in announcing premier projects in the city.