Property prices in both Mainland China and Hong Kong have skyrocketed in recent years. Hong Kong’s South China Morning Post reported that a 3-storey house on The Peak, with a view of Victoria Harbour, changed hands on March 16 at HK$280 million (RM115.3 million). With a gross area of 4,650 sq ft, the transaction has priced the property at HK$60,215 psf, making it the most expensive home in Hong Kong in terms of price per square foot.
Prices of high-end residential properties in sought-after locations in Hong Kong surged 50% last year, before rising another 10% in the first two months of this year, the report said.
A Reuters report in The Sydney Morning Herald on April 12 said several plots of land in downtown Beijing recently fetched record prices — bought by state-owned companies with core businesses that have nothing to do with real estate
On March 19, the state-owned Asset Supervision and Administration Commission of the State Council directed 78 state-owned firms with no core business in real estate to withdraw from the Chinese property market after they have completed their current projects.
In Shanghai, meanwhile, a news report on March 10 said two villas in the Sunville development were transacted earlier in the month. One, with a gross floor area of 12,615 sq ft, was sold for RMB247 million (RM120.2 million). The other, with a gross floor area of 34,262 sq ft, went for RMB180 million.
Quoting the latest data from China Real Estate Information Corp (CRIC), Shanghai Business described the former as a record-breaking residential transaction in Shanghai in terms of total selling price.
The average price-to-income ratio in Beijing has reached 27:1, five times the world average, according to data from the Bureau of Statistics of the Beijing Municipality. The average price-to-rent ratio neared 500:1 in the city, far above the international alarm threshold of 300:1 — sending out a strong signal that the foundations of the real estate boom could be losing stability.
The latest data from the National Bureau of Statistics showed that despite the government’s efforts so far to curb gains, real estate prices in 70 cities in China rose in March at a record pace of 11.7% from a year ago.
Interestingly, it was reported recently that the Shanghai property market saw lower sales volumes in the first two months this year. Sales of new homes, excluding those designated for relocated residents under urban redevelopment plans, plunged 54% to 3.44 million sq ft in February — the smallest volume registered by Shanghai Uwin Real Estate Information Services Co since it began to track the local market in 2005.
Still, against this backdrop, property prices in Shanghai have managed to stay buoyant. In February, the average price of new homes in Shanghai dipped 1.3% from January to RMB19,696 psm, but that decline mostly reflects sales of more homes in the cheaper outlying areas of the city.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 803, April 26-May 2, 2010
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