Sales of luxury China property to rise after curbs on pre-sale licences lifted

Transaction volume in the high-end residential property market on the mainland will rise this year after authorities lifted curbs on pre-sale licences, but prices will increase at a slower pace as money flows out of the mainland, industry analysts say.

Beijing and Shanghai allowed the pre-sale of expensive home projects in January after imposing bans in October and November, respectively.

The licence suspension caused an accumulation of demand that would drive up transaction volume in 2014, said Gao Shan, vice-general manager of Yahao Real Estate Selling & Consulting Solution Agency.

Data from another agency, Landz Realtors, showed primary market transactions of high-end homes in Beijing slid 25 per cent last year from a year earlier to 3,567 units. However, deal numbers still exceeded full-year supply of 2,069 homes from 11 projects, including seven villa projects and four apartment developments, and cut the stock of unsold high-end homes to 5,375 at the end of 2013, down from 6,873 a year earlier.

"We expect rising supply in 2014 will not lead to a surge in stock, as new supply will mainly be villa projects and will be instantly taken up," Landz Realtors said in a report.

It said prices of high-end homes rose 6 per cent in 2013 to an average of 49,644 yuan (HK$63,550) per square metre in Beijing. Global property consultancy DTZ said prices rose almost 25 per cent last year to an average of 52,129 yuan per square metre.