(Yicai) Feb. 14 -- Demand in Shanghai's luxury residential market will remain strong this year, boosted by several supportive policies, but the quality of projects will continue to have a significant impact on their competitiveness, according to an expert.

The popularity of the premium home market in Shanghai was reflected to some extent by sales of high-priced properties beating expectations last year, Tang Hua, head of residential sales at the China arm of real estate adviser Savills, told Yicai.

Some clients are still willing to buy luxury assets in Shanghai, and such demand could be unleashed anytime, Tang noted, citing market research conducted by Savills at the end of last year and the start of this year. The city's premium property market may perform better in the first half of this year compared with a year earlier, Tang added.

Most units in the second phase of the Shanghai One Sino Park project in Huangpu district, which launched sales in the middle of last month, have already been sold, marking a strong start for this year's luxury home market, Tang pointed out.

However, luxury residential projects can face challenges with location, features, amenities, and others, which are key factors in determining whether consumers are willing to pay high prices.

The competition in Shanghai's heritage villa market will intensify this year, according to Tang. Developers must compete for customers by refining product quality across all dimensions, building strong brand influence, and enhancing promise deliveries, Tang said, adding that projects with unique features and premium amenities will be more competitive.

Editors: Tang Shihua, Martin Kadiev