Despite ongoing challenges in China’s broader real estate market, Shanghai’s luxury property sector continues to flourish, with affluent investors driving record-breaking sales. More than 60% of China’s high-end homes priced above 30 million yuan (US$4.2 million) were sold in Shanghai last year, highlighting the city’s resilience as a prime real estate destination, according to data from China Real Estate Information Corp (CRIC).
Luxury Properties Defy Market Trends
While China’s real estate industry remains under pressure, ultra-high-end properties in Shanghai are seeing extraordinary demand. Market observers note that wealthy investors view luxury homes in the financial hub as a safer alternative to stocks and other investment avenues.
A striking example of this trend was seen in the recent launch of Kerry Properties’ Jinling Residence, where all 158 units—priced between 40 million yuan and 170 million yuan—were sold within 24 hours, generating over 9.2 billion yuan in revenue.
“Frenzied buying in Kerry’s new development underscores that Shanghai remains a highly attractive market for high-net-worth individuals,” said Zhu Xinhai, sales manager at 5i5j Real Estate Brokerage. “However, middle and lower-income buyers remain cautious about entering the market despite sustained housing demand.”
Prime Location Drives Demand
Jinling Residence’s exceptional location in Huangpu District, near The Bund, Yu Garden, and East Nanjing Road, played a crucial role in its rapid sell-out, said Lu Wenxi, an analyst at Centaline Property Agency.
“Compared to developments in less desirable areas, Kerry’s pricing appears justified,” Lu noted. “Shanghai’s luxury housing market is poised to maintain its upward trajectory.”
The demand for high-end homes is part of a broader shift among investors seeking stability amid economic uncertainty. Last year, Singapore’s CapitaLand sold all 75 units at its Huangpu luxury development within 45 minutes of launch, raking in 3.1 billion yuan.
Investor Confidence in High-End Homes
According to Wang Feng, chairman of Ye Lang Capital, a Shanghai-based financial services firm, affluent buyers continue to favor premium properties as a safe investment option. “With low bank deposit rates and a sluggish stock market, high-end real estate—especially in limited-supply areas—remains an attractive asset,” Wang explained. “Strong demand at Kerry’s project was anticipated, given the supply constraints.”
However, the optimism surrounding luxury homes does not extend to Shanghai’s mass housing segment. Many potential buyers expect prices to decline further, leading to prolonged inventory clearance times. CRIC estimates that, at current sales rates, developers may take over a year to sell their remaining stock.
Government Measures and Market Outlook
To stimulate the broader property market, China’s central government instructed banks last September to lower mortgage rates by half a percentage point. In response, Shanghai authorities introduced policy adjustments on October 1, expanding property eligibility for non-local buyers and reducing down-payment requirements for first-time and existing homeowners.
Despite these measures, pre-owned home prices in Shanghai remained largely unchanged in March, averaging 56,352 yuan per square meter—down 4% from the previous year, according to Jiwu.com.
The country’s real estate sector has been in crisis since 2021, with over 50 developers defaulting on a combined US$100 billion in offshore bonds between 2022 and 2023, according to a JPMorgan report. Sales of new homes and construction activity have continued to decline, as consumer confidence in the broader housing market remains weak.
Shanghai’s Role as a Luxury Real Estate Stronghold
Despite these headwinds, Shanghai’s luxury property market stands out as a rare bright spot. The city’s prime locations and limited supply continue to attract high-end investors, reinforcing its reputation as China’s premier destination for ultra-luxury real estate.
While the broader real estate market faces an uncertain future, Shanghai’s top-tier properties are proving to be an exception—offering stability, exclusivity, and long-term value for discerning buyers.
