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.
Recent research found that the mainland’s new rich were mostly from the internet technology and financial industries and were much younger, thus of a totally different taste compared to the past wealthy generations.
Apart from One Sino Park, Sunac has eight other high-end projects on sale at different stages of development in Beijing.
Across the capital, 10 projects priced above 100,000 yuan per square metre are on sale now and a further 15 will come on to the market in the next six months, bringing total supply to more than 2,000 units.
Before 2015, Beijing sold an aggregate 113 units of luxury homes priced above 100,000 yuan per square metre, while transaction volume so far this year has already exceeded that, according to data from property agency Centaline China.
Read more at South China Morning Post.