China property: Shanghai’s luxury homes sell out as developers target the super-rich

China’s luxury property market, which seems to have skirted the gloom in the mass housing segment, has catalysed developers to speed up launches of high-end homes as they seek to repair their balance sheets.

On Sunday, all 33 units offered in the initial launch of Blossoms China, a luxury residential project in Shanghai co-developed by Sunac China Holdings and Xinhu Zhongbao, were snapped up by homebuyers, pulling in some 1.8 billion yuan (US$252.8 million).

These flats, ranging from 267 square metres (2,874 sq ft) to 456 sq m, were priced at 170,000 yuan per square metre (15,793 yuan per square foot) on average, according to Sunac. A few 900 sq m duplex apartments were also sold, the developer said. The average price of new homes sold in Shanghai in July was 64,466 yuan per square metre, according to real estate information provider Fang.com.

The prices of luxury homes in tier-one Chinese cities remain resilient despite an overall decline in the sector. Some projects in Beijing and Shanghai have seen their prices increase while those of ordinary homes in these cities have experienced declines of 20 per cent to 30 per cent, Yang Kewei, an analyst at China Real Estate Information Corporation (CRIC), said in a note on Friday.

Blossoms China, located in Huangpu district within walking distance of the Xintiandi shopping and entertainment area, has a total of 533 flats and 151 town houses, which will be sold in four rounds. The second batch of 107 units is likely to be offered before the year-end, Sunac said.

The sale comes a week after the developer sold all 110 units at another luxury project, One Sino Park, in the same district. In addition, Suhe Grand Mansion in the nearby Putuo district, developed by Yuexiu Property, sold all 124 flats within a day of the launch on August 17, extending a trend of robust sales in the city’s luxury property market this year.

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More than 1,540 luxury homes in Shanghai priced at 30 million yuan or above were sold in the first half, the most in 10 years, according to data compiled by CRIC. Meanwhile, 20 out of 23 premium residential projects – priced at more than 100,000 yuan per square metre – sold more than 70 per cent of their inventory on the day of the launch, during the same period, CRIC added.

The trend is noticeable in other tier-one cities. In Shenzhen, China Overseas Land & Investment is expected to launch 69 flats in Arcadia Bay in the southern technology hub’s Nanshan district by the end of September, according to agents. The units will be priced from 130,000 yuan to 180,000 yuan per square metre, they added.

The developer has been buoyed by the robust sales of the first batch of flats in June, when it sold all 130 units offered at an average price of 34.3 million yuan.

“The super-rich are still eyeing luxury homes, as premium properties in good locations remain rare [amid a downturn in the market],” said You Liangzhou, owner of Shanghai-based property agency Baonuo.