Shanghai’s property market remains robust thanks to influx of talent, says Savills

Although land prices are skyrocketing in China’s first tier cities, Albert Lau, chief executive of global property consultant Savills China, said the future of Shanghai’s property market is promising because the city’s fast development will attract more talent.

“Shanghai’s ambition to develop into a global financial, maritime and technology innovation centre means it needs to absorb a large number of talented people,” said Lau.

The resident population of the largest metropolis in eastern China has grown rapidly in the last two decades, from 13 millionin 1995 to 24 million people in 2015. By population, Shanghai is currently the second largest city in China, only behind Chongqing.

Lau said the population inflow is set to continue and that will boost future demand for housing.

Meanwhile, he said rapid home price growth and a robust rental market show that the city’s housing market is still “in short supply”. According to Savills, the occupancy rate of available apartments in the city is nearly 100 per cent. Official data shows Shanghai’s new home prices surged more than 30 per cent year on year in July.

Land prices in Shanghai also hit new highs in the past few months as developers scrambled for prime plots in the city. In mid-August, a residential plot in central Jingan district sold to a developer for 100,000 yuan per square meter, the most expensive land ever in China in terms of average floor price.