Published By : 04 Nov 2015 | Published By : QYRESEARCH
The prime property market in Shanghai is having a moment as of now and this could mean that the overall property market in China is on the road to recovery after a rather long slowdown.
Knight Frank, estate agent, released the quarterly Global Prime Cities Index this week and it reveals a strong price growth in Shanghai for luxury properties, which forms the most expensive 5 per cent of housing. Prices in this category went by 10.70 per cent from the last quarter of the previous year to the end of September this year.
Knight Frank said that the demand for luxury properties in Shanghai is being fueled by the reversal of stringent housing policies and the introduction of the latest fiscal measures.
This comprises the latest cut in the rates of interest from the People’s Bank of China and a lowering of mortgage requirements.
Government interventions such as these are intended to kick-start the struggling economy in China. In 2014, growth stalled to the lowest rate in 20 years and the stock market in the country is extremely volatile. The Shanghai Composite has dropped by over 25 per cent over the past six months.
The housing market in China is not particularly thriving either. Business Insider reported that according to a note from Merrill Lynch at Bank of America, transaction volumes for housing in September grew at a mere 0.1 per cent, which is practically flat.
However, at least government intervention seems to be working in the high end of the Shanghai property market. Price growth is on the rise; compared to the 2.9 per cent growth in the first quarter of the year and the 7.3 per cent growth in the second quarter, the third quarter has presented a growth of 10.70 per cent.