With the development of AI (Artificial Intelligence) and chip industries by the Chinese Communist Party, the purchase of luxury homes by high-income groups has attracted attention, but analysts believe it may not be enough to trigger a new round of housing price increases.
According to data from Prosmart Data Intelligence, a real estate consulting and data analysis company, in the first half of this year, a total of 18,000 newly built residential units worth at least 10 million yuan (RMB, equivalent to around 1.5 million USD) were sold in 35 major cities in China, a decrease of 13% compared to the same period last year. During the same period, there were 1,636 newly built homes sold between 30-50 million yuan, a 38% increase from the first half of last year. Transactions of homes priced over 50 million yuan increased by 11%.
In the first half of the year, the total number of homes priced over 30 million yuan sold in Shenzhen reached 619, a significant increase of 247% year-on-year; in Hangzhou, luxury homes priced in the tens of millions had 2,516 transactions, a 40% increase, with transactions for properties over 30 million yuan being 14.5 times that of the same period last year.
In mainland China, high-quality homes refer to residential units with a minimum selling price of 10 million RMB, while luxury homes generally refer to apartments and villas priced at no less than 30 million RMB.
According to a report by “Yicai”, a person in charge of a high-end project in Hangzhou admitted that their clients mainly consist of founders and executives of companies in Zhejiang province, as well as bosses of listed companies, with the majority being in industries such as finance, semiconductor, AI, and new materials, primarily aged between 35 and 45.
As reported by the English version of theHong Kong-based South China Morning Post on August 16, luxury home sales in first-tier and key second-tier cities in mainland China are heating up, sparking expectations of a nationwide real estate market recovery after six years of stagnation.
In a report, HSBC stated, “We believe unexpected positives may emerge in the second half of 2026. We expect the release of similar high-quality projects to boost market sentiment and consolidate the momentum in the land market.”
However, analysts contend that these types of properties only make up a small portion of the mainland China real estate market, and the sales growth and price increases are not enough to reverse the overall downtrend of the real estate market. You Liangzhou, head of Shanghai Baono Real Estate, said, “The majority of the middle and low-income groups remain cautious in home buying, so it is too early to assert that the property market is fully recovering.”
Sales consultant at Shanghai Lianjia Real Estate, Yan Zhancai, mentioned, “Any positive news related to the real estate industry could trigger speculation that the property market is about to hit bottom, but the bustling luxury home transactions alone may not be enough to trigger a new round of housing price increases.”
Data released by the National Bureau of Statistics of China on August 17 shows that the current real estate market in China continues to remain sluggish. Real estate development investment dropped by 19.2% year-on-year in the first seven months of the year, with residential investment declining by 19.1%. During the same period, construction area decreased by 12.7%, and the area for new construction dropped by 24%.
Sales data also continue to decline. In the first seven months, the sales area of new commercial housing decreased by 11.8% year-on-year, with the sales area of residential properties dropping by 12.7%. The sales amount of new commercial housing decreased by 13.1%, with the sales amount of residential properties falling by 13.2%. Both sales area and sales amount remain negative.
Nomura’s chief economist for China, Lu Ting, previously told Chinese media that the stagnation of the real estate market in recent years has accelerated a “K-shaped differentiation”. Firstly, the decline in property prices is more evident in third and fourth-tier cities, while first-tier cities see less decline and are more likely to rebound, affecting middle and low-income groups and migrant worker groups who predominantly purchase properties in third and fourth-tier cities. Secondly, as major cities gradually lift purchase and sales restrictions, a large amount of manpower and wealth are concentrated in first and second-tier cities, intensifying urban development differentiation.