Luxury home sales rebound in mainland China but overall market recovery unlikely: analysts
Luxury home sales in mainland China are increasing due to high-net-worth individuals, but analysts warn this does not signal a broad recovery for the struggling property sector. The industry remains burdened by developer defaults and cautious middle-income buyers.
Why it matters
The real estate sector accounts for a quarter of China's economic output, making its stability critical to the global economy.
Sales of luxury homes in mainland China’s top cities are picking up as high-net-worth individuals, benefiting from the country’s tech boom, splash out billions of yuan to improve their housing.
The buying binge has sparked expectations of a broad market recovery after a six-year property slump across the country, according to brokers.
But analysts said such homes represented just a small portion of the mainland’s property industry, with increasing sales and higher prices not enough to turn the overall real estate sector around.
“Most middle- and low-income people are still taking a cautious stance on homebuying,” said You Liangzhou, the owner of the Baonuo property agency in Shanghai. “It is too early to conclude that a full-scale recovery has taken shape.”
China’s real estate sector and related industries, such as home appliances and construction materials, account for about a quarter of its economic output.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in