Mainland China’s luxury housing boom is keeping wealthy buyers at home, report says
Shanghai’s high-end market continues to outperform as Hong Kong records fewer HK$100 million-plus deals
China’s booming luxury housing market is keeping more wealth onshore, a trend that analysts say may pose a growing challenge to Hong Kong’s still resilient high-end residential market.
While China’s broader housing market remained mired in a five-year downturn, with average new-home prices having fallen about 13 per cent since the market peaked in 2021, the report said prices of new luxury homes in Shanghai had climbed 31 per cent in the same time, with the number of sales up more than 50 per cent.
It said the recent buying frenzy had begun to ease as pent-up demand faded, but the luxury market was likely to continue outperforming because its supply/demand dynamics were fundamentally different from those of the broader housing sector.
“Wealthy households have taken less of a hit from sluggish economic growth,” Zhang said in the report, which was released on Monday.
Unlike most homebuyers, affluent households relied more on investment income than wages, had lower debt levels and benefited from higher mainland stock prices, she said.
Decades of restrictions on building large luxury homes had also left the segment with far less excess supply than the mass market, the report said, helping support prices despite the broader property downturn.