The demand for luxury residential properties are likely to be only slightly affected by China’s strict controls on the overall residential market, said Colliers International in a report.
Colliers based its conclusion on sustained purchasing power from diversified consumers and growing enthusiasm for investing. It also added that the improved quality of units available and healthy economic fundamentals should help in ensuring a positive outlook for the luxury residential market.
Tightening policies led to a halt in overall luxury residential sales in the third quarter, according to a report from Colliers. However, there were indications that sentiment had turned positive as transaction volumes rebounded and average sales prices became stable.
“Under the collective impact of growing leasing demand and tight existing stock, the leasing market remained active in this quarter, as forecast in our previous report, with the overall vacancy rate declining and the average rent escalating during the quarter,” it noted.
Colliers also expects the Beijing luxury residential market to receive a new supply of 5,632 units for the rest of the year, as many property developers opted to launch pre-sales of new projects in Q4, along with projects postponed from Q3 to Q4 2010.
While owner-occupancy and rental demand for luxury properties will likely remain stable, a seasonal impact on the leasing business and the concentration of new completions in Q4 should see an increase in overall vacancy, said the report.