While home sales in many parts of China are still held back by an oversupply of unsold housing, Shanghai’s residential market has continued to boom, becoming the world’s eighth most expensive place to buy a home, according to a recently released study.
By the end of 2015, spending $1 million on a home would only get you a 46 square metre (495 square foot) dwelling in China’s commercial centre, says the Wealth Report 2016, which was officially released in Shanghai last week by property consultancy Knight Frank.
Since the end of the year, housing prices in Shanghai have risen still further, with average home prices in the eastern Chinese city rising 15 percent in January from a year earlier, and were up 2.2 percent compared to December.
“At the beginning of 2016, the luxury home market has continued to boom,” noted Regina Yang, Director and Head of Research and Consultancy in Shanghai for Knight Frank. “In the first-hand residential market, 255 luxury residential units worth over RMB20 million each, were sold in the first two months of 2016, a significant 222% increase year- on-year.
In all, three Chinese cities ranked among the ten most expensive housing markets in the world, according to Knight Frank, Hong Kong ranking second on the list, with $1 million buying you only a 20 square metre home. Beijing came in tenth, with $1 million fetching you a comparatively spacious 58 square metres.
The most expensive housing market in the world was Monaco, where $1 million would only provide you with 17 square metres of space.
According to the agency, a series of policies introduced by the government to help rid the country of an excess supply of unsold homes in smaller cities has contributed to a boom in Shanghai. These measures include the reduction of mortgage rates and changes in taxes on residential real estate transactions.