NewChina's luxury home market heats up, worries also increase

Mainland developers are quickening the pace to sell luxury homes to cash in on a policy-induced market recovery, arousing worries about fierce competition under a possible oversupply.

Many such projects are built on land parcels bought in the past two years at a high price, leaving developers with no alternatives but to target the country's richest as potential clients.

For example, Sunac China Holdings will price a luxury project near Beijing's prime East Third Ring Road by up to 400,000 yuan (HK$506,000) per square metre for lakeside homes.

The developer bought the site at the peak of the country's housing market in 2013 at more than 70,000 yuan per square metre - a record for the capital that year.

The project, One Sino Park, is so expensive that Sunac's founder and chairman Sun Hongbin said he could not afford it.

"We are trying to understand what rich people really want," Sun said last week, adding that potential clients included entrepreneurs who controlled companies listed in the country's growth board instead of coal-mine owners traditionally.