Tuesday, April 24, 2012

Sales of luxury property in Beijing down 78%

Beijing’s luxury property market recorded a weaker showing in the first quarter of this year, with some developers presenting poorer financial conditions while others were forced to issue debt notes.

According to Colliers International, total sales volume for luxury homes hit just 35,000 sq m from January to February, down 77.83 percent from the previous year. Despite the strong leasing market, overall average capital values slid 2.58 percent QoQ.

“Total stock of luxury residential property market expanded to 75,708 units, up 4.71 percent quarter-on-quarter or 13.84 percent year-on-year by the end of this quarter,” noted Colliers.

Stocks of luxury apartments and villas rose 6.34 and 2.76 percent to 49,179 and 17,779 units respectively.

“Leasing demand was strong in Q1 2012, driven by the expansion needs of MNCs and seasonal tenant returns. With the overall vacancy rate dropping to 19.91 percent by the end of the quarter, those of the luxury apartment, serviced apartment and villa sectors declined by 0.42, 1.18 and 0.99 percentage points to 19.85 percent, 7.88 percent and 25.97 percent respectively,” added the consultancy.

Colliers expects the construction of new luxury residential projects to decline for the rest of this year.

“Demand for investing in the residential property market should continue to be pent up, with price correction still being a main priority. The robust leasing market and the rather healthy rental growth, in conjunction with undergoing price adjustment, are expected to continue to increase investment yields,” it said. 

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Source From Property Guru

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