(Yicai) Oct. 29 -- Property developers are moving swiftly to bring new luxury homes to market in Shanghai in response to booming demand following the government's release of favorable real estate policies.

A project based in Xuhui district's scenic riverside area Xuhui Binjiang is set to start sales next month, Yicai learned from China Merchants Shekou Industrial Zone Holdings yesterday. The project, led by a China Merchants Group subsidiary, will offer 124 apartments at over CNY10 million (USD1.4 million) each in its initial phase, with unit prices averaging CNY112,000 (USD15,693) per square meter.

Despite a recent market slowdown that left many developers cash-strapped and buyers cautious, luxury homes are experiencing a surge in demand amid a broader recovery in Shanghai’s property market. So far this year, 30 projects have sold out on launch day this year, with nearly 60 percent of these commanding prices above CNY100,000 per sqm, based on data from a local branch of China Real Estate Information.

Developers are eager to meet this demand. Yicai learned that China Overseas Holdings will soon open sales for another project in Xuhui Binjiang, with apartments priced around CNY12 million and unit prices exceeding CNY130,000 per sqm.

Across the Huangpu River in Pudong’s Lujiazui financial district, Lujiazui Development Group is set to launch additional units in a development featuring 148 apartments priced at about CNY112,000 per sqm. In the same district, Swire Properties plans to begin pre-sales for larger units by year-end, offering 50 spacious apartments in two buildings, each with floor areas of approximately 278 sqm to 388 sqm.

Yuexiu Property and Lingang Group also have a luxury project set to launch in Hongkou district’s North Bund this year, featuring 49 apartments priced between CNY40 million and CNY80 million.

Recent data reflect developers' optimism. As of Sept. 29, luxury home sales in Shanghai (valued over CNY30 million each) reached nearly 1,820 units this year, up 93 percent from all of last year, according to CRIC data. Sales of units priced over CNY50 million surpassed 390, more than double last year’s figure.

In the same period, the sale of ultra-luxury homes priced above CNY150,000 per sqm increased by 5.5 times compared to 2023, with over 2,000 units sold. "Top-class" luxury apartments, priced at CNY200,000 per sqm or higher, saw 112 units sold, nearly double the total of such sales over the last four years.

Overall, Shanghai’s property market is rebounding due to a series of new policies that the city introduced in late September. The policies fueled buyer interest and bolstered market confidence, according to industry professionals. More specifically, the city lifted resale restrictions and extended the period for land value-added tax exemptions. 

Between Sept. 30 and Oct. 17, new home transactions covered 260,000 sqm, averaging 14,000 sqm daily, a 40 percent year-over-year increase, according to the Shanghai Real Estate Trading Center. Sales of pre-owned apartments reached nearly 10,740 units during the same period, averaging 597 units per day, up 80 percent.

Editors: Xu Wei, Emmi Laine