APPD Market Report Article


May 26, 2024

Mi Yang, Head of Research, North China


RMB 149


Luxury apartment sales drop sharply

  • Sales fell sharply because of seasonal factors and supply shortfalls. A total of 616 luxury apartment units were sold in the quarter, down 59.2% q-o-q and 55.5% y-o-y. However, the overall sentiment in the high-end residential market remained stable, with new projects gaining traction among buyers.
  • The market continued to see positive signals, including the largest decline in the 5-year loan prime rate (LPR) and Beijing’s optimisation of its housing purchase restriction policy in the Tongzhou District. The measures were aimed at boosting the market but had little impact on the high-end residential market. 

The same-quarter new supply hits the lowest level since 2021

  • There were a total of 765 new units launched in 1Q24, a decrease of 16.2% q-o-q and 62.6% y-o-y. Developers held off on new launches due to the Chinese New Year holiday, coupled with softer market conditions.
  • The land market supply increased in the quarter, with high-quality land plots maintaining their increasing transaction prices. According to the 2024 land supply plan, the increase in the supply of high-quality land plots in the core six districts is expected to drive growth in high-end supply.

Prices show diverging trends in the Primary and Secondary markets

  • High-priced new projects drove up luxury apartment prices by 0.7% q-o-q. As supply in the Secondary market increased again after the Chinese New Year holiday, buyer bargaining power increased, causing prices to decline by 1.7% q-o-q.
  • Driven by the resumption of work after the holiday, leasing activities recovered. Rents remained largely unchanged in most submarkets, while active demand in core areas drove rents up slightly by 0.3% q-o-q, approximately the same as the same period last year.

Outlook: The market calls for more policies to stimulate demand

  • Luxury apartment sales are expected to remain tight in the short term due to supply shortages. The market is expected to see a slow recovery when more policy initiatives arrive. The gradual recovery of market confidence is expected to stimulate onlookers to enter the market and promote stable high-end sales in the medium term.
  • Primary capital values are expected to increase slightly, driven by recovering demand and high-priced new projects, while the price divergence among Secondary apartments are forecast to widen. Some projects may lack upward momentum due to the mismatch between buyer and seller expectations. 

Note: Beijing Residential refers to Beijing's overall luxury and high-end residential market.

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