An employee of a real estate firm in Beijing arranges classical style furniture at a high-end home as part of preparations for viewing by prospective buyers. （Photo provided to China Daily）
Prices of high-end properties in Beijing will see a steady rise in the second half of this year due to a supply crunch, industry insiders said.
"Owing to the government's tightening of real estate policies and the tepid market since last year, quite a number of high-end projects in the capital postponed their entry into the market, thus reducing supply," said Li Xiang, senior research manager at Savills, an international real estate services provider.
Demand from wealthy people for improved living standards, however, will not be much affected, and the value of high-end residential products will continue to appreciate, according to Anthony McQuade, managing director of Savills for the Northern China market.
"Fundamentally, there is still a strong demand," McQuade said.
Beijing's pre-owned home market saw online transactions for 18,096 units in May, reaching a 14-month record high, industry data showed.
Volume was up 32.3 percent month-on-month and 67.5 percent year-on-year, the first time that the pre-owned home market in the capital experienced such rises. According to real estate agency 5i5j, the average sale price of a pre-owend home also increased by 0.6 percent compared with the previous month.
"In the near future, a modest rebound might be possible," said McQuade.
With the market stabilizing, an increasing number of high-end projects are expected to enter the market.
Shimao Group, a Hong Kong-listed property developer, for instance, is going to launch its luxury villa project Loong Palace in Beijing this month.
Liu Hui, vice-president of Shimao Group, said it is the company's top project, but did not disclose the prices of its flats.
Hong Kong-lised The Wharf (Holdings) Limited, Greentown China Holdings Limited and China Communications Construction Company Limited are also going to launch a luxury project called One LiangMa along the capital's northeastern Fourth Ring Road.
This is the first time that the three leading property developers are working on a high-end project.
Li Liang, vice general manager of Financial Street Holdings Co Ltd, said market demand is strong, but sale prices of homes will probably remain stable in the rest of the year, restrained by existing policies.
"The current sale prices of new homes are not a real reflection of the supply and demand equation, due to the existing tightened measures," said Li.
Financial Street Holdings, together with Tian Heng Group, is going to launch the latest phase of a new residential project along the capital's South Fourth Ring Road.
The unit price could be lower than 80,000 yuan ($12,698) per square meter. The project's earlier phases were sold for 6.3 billion yuan over the past three years.
