HOME buying momentum continued to rebound in Shanghai last week amid diminishing effects from the central government's tightening policies.

Sales of new homes, excluding those designated for relocated residents under urban redevelopment plans, jumped 39 percent from a week earlier to 242,000 square meters, the highest weekly volume registered since mid-April when the central government made a series of tightening moves to curb housing speculation, Shanghai Uwin Real Estate Information Services Co said yesterday.

The average price, meanwhile, climbed 5 percent to 22,366 yuan (US$3,298) per square meter, the third straight weekly gain.

"Fast recovering volumes, not only in the mid-to-low-end market but also in the high-end sector, are posing increasing pressure on average housing prices," said Lu Qilin, a Uwin researcher. "If home prices continue to rise, it could be possible that further restrictive measures will be launched."

Uwin statistics showed 15 percent of new houses sold currently in Shanghai are priced above 30,000 yuan per square meter, compared to 10 percent recorded a month earlier.

The supply of new homes in the market dived 59 percent to 189,000 square meters during last week from a week ago.

Meanwhile sentiment also improved in the city's existing housing market.

According to a report released yesterday by Century 21 China Real Estate, operator of the city's second-largest real estate chain, about 12,500 units of existing properties, mainly houses, were traded across the city in August, a surge of 58 percent from July.

The average price edged up 0.6 percent monthly to 17,100 yuan per square meter, according to Century 21.

 

"CUSTOMERS on the Chinese mainland have much higher enthusiasm in purchasing luxury than in other places," Ivan Tong, chairman of Sparkle Roll company, one of the main luxury distributors in mainland, said in a recent interview with Xinhua.

Sparkle Roll, a Hong Kong-based company, was previously engaged in comics and animation development, but it has evolved into a distributor for top luxury goods through acquisition of an automobile dealership in 2008, eying the potential of the luxury markets on the mainland.

Besides automobiles, Sparkle Roll has diversified its business to include distributorship of top tier watches, jewelry and red wines as well.

The company's turnover soared nearly 100 percent from a year earlier to HK$1.2 billion (US$154 million) in the fiscal year ended March 31.

Tong credited his company's stellar performance to the "fast economic development of China and a growing number of newly rich people."

Luxury car Bentley costs 3.5 million to 7 million yuan (US$500,000 to US$1 millions) on average. Now one in every 10 Bentley is sold on the Chinese mainland. It's almost the same with Rolls-Royce and Lamborghini.

DeLa Cour BiTourbillon Watches, from Swiss luxury watch brand deLa Cour, entered the mainland in January and it was not long before a deal worth HK$4.2 million was sealed with a client.

A report on China's commercial development 2009-2010 released in Beijing in May said China is set to rank as the world's biggest market for luxury goods in five years.

Written by the Chinese Academy of Social Sciences, the report said China's luxury goods market had increased to US$9.4 billion last year, accounting for 27.5 percent of the world's luxury goods market and replacing the United States as the world's second largest luxury goods market, second only to Japan.

In five years, the market for luxury goods in China could reach US$14.6 billion, becoming the largest in the world, the report said.

"Over 30 years of economic reform since 1978 have benefited the Chinese people, creating many billionaires," said Tong. What's more, "most of the rich people in China were not affected by the global financial tsunami because the renminbi is not convertible," Tong said.

Tong said he was once told by a businessman who was familiar with the global luxury industry that China's fast development and growth in luxury was impressive.

 

AUTO sales in China rebounded in August as subsidies for energy-efficient vehicles and a stronger currency spurred demand.

Sales in the world's biggest car market rose 55.7 percent over a year earlier to 1.21 million vehicles, up from 1 million vehicles the month before, the State Council's China Automotive Technology and Research Center said yesterday. The increase compared with an annual 17 percent growth in July and 19.4 percent in June.

Sales of energy-saving vehicles rose 32 percent to 129,600, the center said in a report posted on its website.

Demand was also relatively strong for imported vehicles, as Japanese and European auto makers increasingly focus on serving the market for smaller, affordable cars, the center's Chairman Zhao Hang said, without giving specific figures.

A recent rise in the value of China's currency has also stimulated sales of imported cars. "That makes things cheaper," Zhao said.

The rebound in sales is good news for global auto makers looking to China to drive sales amid weak global demand. Sales this year are forecast to grow by no more than 20 percent, well off the stunning 45 percent rise in 2009.

The center, one of several sources of monthly data on Chinese auto sales and production, estimated sales in January to August at 9.5 million vehicles, up almost 32 percent from the same period of 2009.

Monthly sales growth had waned after March's 63 percent rise, prompting the country in June to renew subsidies of 3,000 yuan (US$443) per vehicle for fuel-efficient cars and small trucks.

Auto makers have nonetheless begun cutting back on output to match slowing demand.

Production rose 10 percent in August to 1.2 million units, down slightly from July, the report said. Output in the first eight months rose 35.5 percent, to 10.9 million vehicles, it said.


 

HONG Kong sold a piece of land yesterday at a price that was a third above forecasts, indicating that the city's property sector could still be frothy even after cooling measures were announced weeks ago.

The government has been selling land at higher-than-expected prices over the past few auctions as demand for posh apartments has been holding up well in Hong Kong due to low interest rates, purchases from rich Chinese mainlanders and Asia's strong economy.

Sharp rises in housing prices in Hong Kong, a trend seen in many Asian cities, has prompted the government to roll out measures this year, including lowering the mortgage loan ceiling for apartments priced at HK$12 million and above.

The government sold the site on Ede Road, in Kowloon, with an area of about 2,399 square meters, for HK$1.285 billion (US$165 million). Kerry Properties won the bid.

Analysts had expected the land to sell for HK$960 million, the government's sixth auction this year and part of its efforts to cool the red-hot market by raising housing supply.

"This is mainly a traditional luxury district and I guess the developer is seeing demand on the luxury front is still very strong and is unlikely the government will be able to do anything," said Cusson Leung, director of equity research at Credit Suisse.

Trevor Cheung, a property analyst at BNP Paribas, said Kerry Properties would likely build 20 luxury apartment units.