High-end sales momentum remains robust throughout 2024

• In November, Shanghai further eased its housing policies by eliminating the distinction between ordinary and non-ordinary housing and reducing tax levies for home transactions. Coupled with September’s easing of HPRs, homebuying sentiment saw some improvement.
• Overall primary sales rose 13.9% y-o-y in Q4 2024, totalling 7.12 million sqm for the year, down 22.8% y-o-y due to reduced new supply. However, solid upgrading demand pushed high-end sales to 1,937 units in Q4 2024 and 5,711 units for the year, up 85.8% y-o-y.

High-end new launches accelerate

• The pace of new project launches remained slow in Q4 2024. New supply amounted to 2.07 million sqm in the quarter, down 37.3% y-o-y. Annual new home supply totalled 7.71 million sqm, down 24.9% y-o-y.
• In Q4 2024, 13 new high-end projects launched 1,861 units for sale, up 15.6% q-o-q, with average prices ranging from RMB 115,000 to 176,000 per sqm. For 2024, Shanghai’s total high-end supply reached 6,704 units, up 138.9% y-o-y.

High-end primary prices continue to increase

• In Q4 2024, Shanghai’s average high-end primary price edged up 0.3% q-o-q to RMB 143,300 per sqm. Meanwhile, supported by improved sales momentum, average high-end secondary prices saw a narrower decline, falling 3.6% q-o-q to RMB 137,700 per sqm.
• The ample supply of high-end apartments for lease along with soft leasing demand in Q4 2024 prompted more homeowners to lower rents. Thus, Shanghai’s average high-end apartment rent declined by 3.9% q-o-q to RMB 164.0 per sqm, per month.

Outlook: Further policy easing may occur to sustain recovery

• Recent policy moves, including relaxed HPRs, eased mortgage rates and lower transaction tax rates, have helped underpin home sales momentum. However, further policy easing may occur depending on the continuity of this market recovery.
• With current policies, high-end primary prices are expected to rise further, while high-end secondary prices are expected to see narrower declines as Shanghai’s secondary home sales see a steadier recovery going forward.