Chinese efforts to restrict the purchase of multiple properties, in a bid to cool speculation, have only caused property buyers to put even more money into single, luxury units.
The price of luxury homes in China’s key cities saw an increase due to the government’s policy to restrict the amount of homes a family could purchase and investors’ eagerness to hedge growing inflation risks.
In Shanghai, nearly 80 per cent of the new properties that carried a price tag of more than 50,000 yuan ($7,531) a square meter raised their price.
This happened just one month after the Shanghai municipal government announced new regulations to cool down the city’s overheated housing market.
According to property agent Century 21, among the 19 new residential projects priced above 50,000 yuan a sq m, more than 80 per cent of them had a price hike between 7 and 12 per cent from Nov 1 to Nov 17. But the sales volume of these monitored properties dropped more than 20 per cent during the same period.
The situation in Beijing is similar. Industry statistics show that the average price of the top 30 luxury apartments in Beijing reached 57,561 yuan a sq m in the third quarter, an increase of 7.1 per cent over the previous quarter. The year-on-year growth hit 57.8 per cent.
If you can’t buy two then you can still buy one that costs twice as much.