China Luxury Residential Real Estate Market - Growth, Trends, COVID - 19 Impact and Forecasts ( 2022 - 2027)

The China Luxury Residential Real Estate Market is segmented By Type (Villas and Landed Houses, Apartments and Condominiums) and By Cities (Beijing, Wuhan, Shanghai, Shenzhen, Guangzhou and Other cities). The report offers market size and forecasts in value (USD Billion) for all the above segments.

Market Snapshot

market-snapshot
Study Period: 2018-2027
Base Year: 2021
CAGR: >5 %

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Market Overview

The China Luxury Residential Real-estate market is expected to register a CAGR greater than 5% during the forecast period.

China’s luxury residential real estate market is fairly concentrated, with more than 100 luxury residential real estate developers providing luxary homes who are holding the major market share and having a hold on huge inventories. These developers were under a lot of pressure during the COVID-19 pandemic. In Tier 1 cities, prices moved upward strongly in Shenzhen and Hangzhou. They were slightly higher in Shanghai and stable in Beijing during the pandemic period.

China's luxury residential real estate sector, which relates to a significant portion of the economy, is likely to see stabilization in 2022, after a turbulent 2021 during which many companies and market segments saw their slowest-ever growth or even declines. For instance, the luxury residential real estate market was the subject of 651 regulatory policies in 2021, the highest on record and 33% more than in 2020. 

Since the second half of 2021, China's luxury residential real estate market has shown indications of slowing down, with sales volume and home prices falling in a number of Chinese cities. The market's correction has led domestic financial institutions to upgrade their property-related financial services in order to keep up with shifting market dynamics. For example, the China Construction Bank has introduced JianrongJiayuan, an app that focuses on the long-term leasing sector.

The census results from China’s National Bureau of Statistics released in May 2021 which is a challenging reality for the country – its population growth is slowing. This trend has shown up a great impact on luxury residential real estate in China.The luxury residential property prices have grown dramatically. Despite policy curbs, home prices grew at the fastest pace in eight months in April 2021, with new home prices up about +0.5% month on month and sales up by about a third year over year. Furthermore, a considerable part of all bank loans in China is property related. Out of these reasons, the development of the real estate sector is crucial for economic stability and the government is taking considerable efforts to control and stabilize the market.

Scope of the Report

Luxury Residential real estate refers to properties that are exclusively designed for human occupation, which provides charmed and resort life with high end amenities. Luxury residential real estate is something which has wider concept than simple homes, the homes equipped with all the luxarious items like home decor, security, home plans, high end kitchens, Surreal view from the property, smart home features and lavish property amenities are called as luxury homes or luxury residential real estate. The China Luxury Residential Real Estate Market is segmented By Type (Villas and Landed Houses, Apartments and Condominiums) and By Cities( Beijing , Wuhan ,Shanghai ,Shenzhen ,Guangzhou and Other cities) . The report offers market size and forecasts in value (USD Billion) for all the above segments.

By Type
Villas and Landed Houses
Apartments and Condominiums
By Cities
Beijing
Wuhan
Shanghai
Shenzhen
Guangzhou
Other Cities

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Key Market Trends

Growth of urbanization driving luxury residential real estate market

One of the factors driving demand for the luxury residential real estate market is the rising pace of urbanization, noting that at the end of 2020, China’s urbanization ratio was around 64% and this ratio to rise over the next five years to 70% or 75%. Between 2000 and 2020, an estimated 415 million new residents settled in China’s cities, and an estimated 208 million will settle by 2040, according to estimates by the United Nations. With improving job market conditions, better income growth, consumers or households are still looking for (an) upgrade or buying primary (residences).

Despite the high price tag, the demand for luxury housing in China is on the rise. Depending on the location, a luxury home can vary in price significantly. Hong Kong has the highest average price per square foot of prime luxury residential property worldwide. As of April 2019, the top two most expensive luxury residential real estate sale occurred in Hong Kong. Ho Tung Gardens on the Peak in Hong Kong sold for 657.9 million U.S. dollars, which was a significantly higher amount than the second most expensive property.

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Increase in demand for luxury residential properties in the country due to favorable mortgage rates

The decision of house purchase is also influenced by lending mortgage rates in the luxury residential real estate market. In February 2022, banks in nearly 90 Chinese cities slashed mortgage rates in an effort to boost sales and mood in a residential and luxury residential real estate market roiled by a liquidity crisis and struggling developers. Commercial lenders decreased mortgage rates after the central bank cut the benchmark LPR twice in December 2021 and January 2022, aimed at boosting the world's second-largest economy's flagging growth. For the first time since mid-2020, mortgage rates in Beijing and Shanghai have fallen month over month.

China's four biggest banks lowered mortgage rates in the southern city of Guangzhou by 20 basis points in February 2022. Mortgage rates in smaller cities such as Hohhot, Zhongshan and Huizhou were cut by 30 basis points. Since late 2021, authorities have taken a slew of measures to avert a hard landing for the property sector, including steps to support buyers such as newly married couples. The Shanghai branch of the central bank has told commercial lenders in the financial hub to accelerate real estate-related loans. In 2022, China's central bank slashed a key mortgage rate for the first time in almost two years, the shares of Chinese property developers soaring in Hong Kong. The stock prices of Hong Kong-listed Chinese property developers increased dramatically, recovering some of the recent losses.

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Competitive Landscape

The China Luxury Residential Real Estate Market is competative with presence of International and Local players in the market. The China Luxury Residential Real Estate Market can be defined as as semi-consolidated market. Some of the top players in this market are Evergrande Real Estate Group Limited, Christie's International Real Estate, Luxury Estate , 4321 property, China Vanke Co. The growing presence of international funds and foreign capital is increasingly attracting domestic developers to have joint ventures as a way of gaining a foothold in the country and enhancing their financial strength and management expertise.

Recent Developments

November 2021 : Christie's announced that it will sell its Christie's International Real Estate business to properties, a real estate brokerage, and technology firm, and will enter into a long-term global brand license agreement with the firm, which is one of the world's fastest-growing luxury brokerage firms. Christie's International Real Estate's new strategy is aimed to build on the company's achievements and position it for rapid growth under the direction of an industry specialist. Christie's operates in 46 countries across the Americas, Europe, the Middle East, and the Asia Pacific, with worldwide sales hubs in New York, London, Hong Kong, Paris, and Geneva. It's also the only foreign auction house with permission to hold sales on the Chinese mainland (Shanghai).

July 2021 : As per The Bussiness Times, China's luxury retirement homes draw millions from investors. For a growing number of Chinese and international investors, elder-care developments like Ardor Gardens are becoming irresistible bets. Money is pouring into the sector amid renewed attention on just how quickly China is aging. Chinese investment company Citic Capital is aiming to build a handful of elder-care projects with partners in major cities over the next few years, said the head of the firm's real estate division Stanley Ching. New China Life Insurance meanwhile just started selling a new 280,000 square metre (three million square foot) elderly-care complex in a suburb of Beijing - roughly the size of 40 standard soccer fields. 

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables

    2. 1.2 Study Assumptions

    3. 1.3 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

    1. 2.1 Analysis Methodology

    2. 2.2 Research Phases

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Dynamics

      1. 4.2.1 Market Drivers

      2. 4.2.2 Market Restraints

      3. 4.2.3 Market Opportunities

    3. 4.3 Value Chain / Supply Chain Analysis

    4. 4.4 Industry Policies and Regulations

    5. 4.5 Technological Developments in the Sector

    6. 4.6 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.6.1 Threat of New Entrants

      2. 4.6.2 Bargaining Power of Buyers/Consumers

      3. 4.6.3 Bargaining Power of Suppliers

      4. 4.6.4 Threat of Substitute Products

      5. 4.6.5 Intensity of Competitive Rivalry

    7. 4.7 Impact of COVID-19 on the Market

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Type

      1. 5.1.1 Villas and Landed Houses

      2. 5.1.2 Apartments and Condominiums

    2. 5.2 By Cities

      1. 5.2.1 Beijing

      2. 5.2.2 Wuhan

      3. 5.2.3 Shanghai

      4. 5.2.4 Shenzhen

      5. 5.2.5 Guangzhou

      6. 5.2.6 Other Cities

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Market Concentration Overview

    2. 6.2 Company Profiles

      1. 6.2.1 Evergrande Real Estate Group Limited

      2. 6.2.2 LuxuryEstate

      3. 6.2.3 China Vanke Co

      4. 6.2.4 Christie's International Real Estate

      5. 6.2.5 4321 Property

      6. 6.2.6 Poly Real Estate Group Co.

      7. 6.2.7 China State Construction Engineering Corporation

      8. 6.2.8 Longfor Properties Co. Ltd.

      9. 6.2.9 R&F Properties

      10. 6.2.10 China Merchants Property Development Co. Ltd.*

    3. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. APPENDIX

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Frequently Asked Questions

The China Luxury Residential Real Estate Market market is studied from 2018 - 2027.

The China Luxury Residential Real Estate Market is growing at a CAGR of >5% over the next 5 years.

Evergrande Real Estate Group Limited, LuxuryEstate, China Vanke Co, Christie's International Real Estate, 4321 Property are the major companies operating in China Luxury Residential Real Estate Market.

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