China's luxury home prices forecast to rise further

PUBLISHED : Thursday, 09 January, 2014, 1:28am
UPDATED : Thursday, 09 January, 2014, 1:28am

The mainland's high-end housing market is expected to continue its upward momentum regardless of any new cooling measures from the authorities.

This is because of strong demand from would-be homebuyers with increased purchasing power, Sun Hongbin, the chairman of developer Sunac China, said yesterday.

"A limited land supply would benefit developers of high-end houses," Sun said. "There's no doubt that purchasing power remains robust and our upbeat forecasts will prove correct."

Tianjin-based Sunac, in which United States buyout firm Bain Capital holds a stake, reported housing sales of 50.7 billion yuan (HK$64.9 billion) last year, beating its target of 45 billion yuan, and up more than 60 per cent from 2012.

Sun said the company, which is listed in Hong Kong, was aiming for sales of 65 billion yuan this year, which was a "conservative" target.

Any fresh austerity measures would not prevent Sunac from achieving its goal, he said.

The National Bureau of Statistics said only one of the mainland's 70 major cities posted an annualised decline in home prices in November, while 26 cities reported price increases of 10 per cent or more.

Shanghai's home prices rose 21.9 per cent year on year.

The Ministry of Land and Resources recently pledged to maintain control of new land supply this year to maximise the economic utilisation of land resources.

Sunac, founded by Sun, spent 4.3 billion yuan on a plot of land in Beijing in September last year, with the price per square metre - more than 73,100 yuan - setting a record for the capital.

Sun said some of the houses to be built there could sell for up to 300,000 yuan per square metre.