Luxury housing sales rise in Beijing

Sales of upscale housing in Beijing reversed a previous downward trend to record a sharp increase in November, driven by appetite from foreign buyers and relatively cheap loans, local real estate consulting agencies have said. Luxury housing, mainly villas priced about 50,000 yuan (7,948 U.S. dollars) per square meter, saw hefty sales of 412 units in November, up 52 percent year on year and 84.8 percent month on month, according to Beijing-based Yahao Real Estate. The busy transactions ended three consecutive monthly sales declines in the capital's luxury housing market, and also marked the sector's largest sales volume in the city since April 2010. Total turnover amounted to 3.5 billion yuan, up 47.3 percent from last year, according to a private research center. Motivated by the good results, industry insiders said many developers are mulling a markup of prices by upgrading their new houses, especially those around prime sites. "About 30 to 40 percent of our clients are from abroad, including some Hong Kong residents," said Mai Zhichang, general manager for Beijing at Socam Development. Some 90 percent of one of the developer's sites, located near the city's eastern business and recreational center, has been sold since its opening last year. Mai pointed out that foreigners who pay taxes for more than a year in Beijing are eligible for house purchases, which is very conducive to sales. For Chinese families without a local residence permit, the required tax-paying term is extended to five years before they can purchase a home. Beijing is one of the pioneer cities in China that have imposed a raft of measures aiming to rein in housing prices amid nationwide concerns about an overheated economy since April 2010. The government has since repeatedly reiterated its firm stance on property market control and vowed to keep in place measures such as higher down payments, bans on third-home purchases and property tax trials. Despite the restrictive measures and this year's grim economic conditions, the country's overall real estate market is showing signs of recovery. New home prices in major cities continued to rise month on month for a sixth consecutive month in November, according to a report from the China Index Academy. New home prices in 10 first-tier cities, including Beijing and Shanghai, also climbed 0.39 percent in November from October, marking a year-on-year rise for the first time in 2012, data from the report showed. The pick-up in the property market came after the country's central bank twice cut interest rates, as well as easing banks' reserve requirements earlier this year. Among this round of recovery, luxury housing attracted particularly strong demand because enterprises tend to make safer investments and put their money into villas that hold value, as the real economy is taking the brunt of a global slowdown, said a deputy manager from Yahao Real Estate. December may see a further rise in sales of upscale housing, industry insiders predicted.