Luxury home sales rebound in mainland China but overall market recovery unlikely: analysts

Data from a real estate consultancy shows 38 per cent rise in sales of homes priced between 30 million and 50 million yuan in first half

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.

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.

Limits on developers’ ability to borrow money that were introduced in mid-2020 led to a property crisis. A wave of defaults by the mainland’s largest developers, such as China Evergrande Group, since 2021 has been a major stumbling block to growth of the world’s second-biggest economy.