APPD Market Report Article


August 26, 2022

Silvia Zeng, Head of Research, South China


RMB 98.7


Housing demand on the road to recovery

  • The housing market in Guangzhou stabilised this quarter as market sentiment was boosted by the relaxation of policy restrictions on housing and mortgage conditions. However, due to a limited stock of high-quality flats available, the primary high-end market’s sales dropped to 1,326 units in 2Q22.
  • The secondary market sentiment, especially in the ZJNT precinct, has continued to warm up as home upgrade buyers and investors deemed houses as hedging assets. The 2Q22 transaction volume in the secondary market recorded a rise in ZJNT, whereas that of other submarkets remained stagnant.

Two new launches in 2Q22

  • Two new high-end projects, Pinyue Hua Fu in Haizhu and Richmond Greenville in Tianhe, entered the market in the quarter. Together with the latest launches from existing properties, the number of newly launched units reached 486.
  • Four projects were completed in the quarter, adding 880 units to total stock.

High-end rental values stagnate during a slack season

  • A number of developers offered discounts during the Labour Day holiday to eliminate stock, while several others, whose projects were in prime locations, increased prices. Primary high-end capital values decreased by 0.3% q-o-q. The growth in secondary market transaction volumes boosted landlords’ confidence, and subsequently, secondary high-end capital values rose by 0.7% q-o-q in 2Q22.
  • Leasing activities slowed in 2Q22, a slack season, since most companies concluded their recruiting process in March. Numerous landlords offered larger bargaining ranges and discounts to cater to tenants. Given this situation, rents were stagnant, with a minor decrease of 0.3% q-o-q.

Outlook: Policy relaxations likely to increase capital values slightly

  • In the short term, gradually lowering mortgage rates and relaxing home purchase restrictions are predicted to restore market confidence. Thus, sales in the primary and secondary high-end markets will likely stabilise and rise slightly. New projects scheduled to launch in 2H22 are also expected to attract buyers to enter the market.
  • Despite the influx of new supply, primary high-end capital values are expected to stabilise, demonstrating an uptick in the short term. However, divergent performances are expected across submarkets in the secondary high-end market, particularly ZJNT and Tianhe North, which will likely resume their growth momentum, while others should remain under pressure given relatively low market expectations.

Note: Guangzhou Residential refers to Guangzhou's luxury residential market.

Talk to us 
about real estate markets.