APPD Market Report Article


November 29, 2022

Silvia Zeng, Head of Research, South China


RMB 98.6


Sluggish market demand in the quarter

  • The central government announced a series of relaxed policies for the housing market at end-September, relaxing the floor of mortgage rates for first-home buyers in certain cities. However, the impact on the sale volume in the high-end primary market was not yet significant in Guangzhou. Buyers adopted a wait-and-see attitude and sale volume in the high-end primary market dropped by 19.0% q-o-q.
  • Buyers in the secondary high-end market demonstrated a preference for prime assets. Demand remained concentrated mainly in central areas, especially in ZJNT. Buildings in non-core locations or emerging submarkets continued to face difficulty in attracting potential buyers.

Five new projects launch in 3Q22

  • Five new high-end buildings, namely Yuehai Yun Gang City in Baiyun, No.1 Financial City and Zhen Ying Ming Zhu in Tianhe, Guangzhou Happy Bay in Liwan, and Poly Hu Guang Yue Se in Haizhu, entered the market in the quarter. Together with the latest launches from existing projects, the number of newly launched units reached 1,675.
  • There were no new completions in the quarter.

Overall market continues a relatively weak performance in 3Q22

  • Sentiment in the high-end market remained weak in this off-season. High-end primary sales stagnated, with a minor decrease in primary high-end capital values by 0.1% q-o-q. In contrast, most sellers in the secondary high-end market were optimistic about their properties’ values in prime locations, offering limited bargains. Secondary high-end capital values increased marginally by 0.5% q-o-q.
  • Leasing activity continued to slow down in 3Q22. As a result of COVID-19 flare-ups across the country, some high-end tenants delayed their onboarding. Rental supply increased due to many tenancy leases expiring at the end of August, which gave tenants more bargaining power. Overall, rental value in high-end properties dropped by 0.2% q-o-q.

Outlook: The overall market continues to be a buyers’ market

  • Since September, the government has relaxed restrictions in housing purchase policies in certain cities, in a bid to stimulate residential demand nationwide. These measures will likely boost buyer confidence and restore strength to market sentiment in both mass and high-end markets in the near term.
  • Liquidity stress faced by property developers will likely remain in the next 12 months, as weak market sentiment lingers. The ‘Three Red Lines’ regulations are also likely to weigh on their funding sources. Therefore, it is expected that Guangzhou’s high-end primary market will remain broadly stable in the near term.

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

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