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Demand for luxury shows growth
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Shanghai's high-end residential property market will maintain its strong momentum next year with expected rental and price growth in all property types, CB Richard Ellis, a world leading real estate service provider, said in its latest forecast.




A total of 732 luxury apartment units are forecast to come on stream in 2008, a significant drop of 60 percent compared to this year.


A decreasing supply of land for downtown development has caused the annual supply of luxury apartments in Shanghai to fall by 20 percent a year between 2004 and 2007.


But outside the city's Inner Ring Road, there is an increasing supply of luxury apartments - defined as costing more than 20,000 yuan per square meter (US$2,700).


CB Richard Ellis forecasts that the average price of luxury apartments is expected to record a stable growth next year, although sales will decrease.




A total of 481 units will be introduced to the local market in 2008, with major supply in Maqiao in Minghang District, Dongjiao in Pudong New Area and in the Dianshanhu area in Qingpu District.


The price is forecast to rise by 8.5 percent next year due to a robust demand and limited supply.


The central government began to halt the release of land for villa development in 2006 and the annual supply of villas since then has dropped significantly.


Serviced apartments


A total of 1,042 serviced apartments will be available next year, with notable developments such as Pinnacle Huashan in Puxi by Morgan Stanley, and Top Glory Garden in Lujiazui, Pudong, by Fraser. In 2009, about 410 units will come on stream including Kempinski's Residence in Xuhui District.


In terms of rental growth, CBRE forecast the average rentals of Shanghai's serviced apartments are expected to rise by 4.2 percent and 2.5 percent for 2009 and 2010, respectively.


That will continue the stable trend over the past two years, which recorded annual rental growth of 5.1 percent in 2006 and six percent in 2007.


The expected slowdown of rental growth is mainly because of the large amount of new completions in the coming two years, despite strong demand generated from the influx of expatriates into the Shanghai.


(Shanghai Daily December 11, 2007)

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