Chinese developers to hike luxury project prices in prime cities
By Clare Jim
HONG KONG (Reuters) - Some Chinese developers are planning to raise prices for new luxury projects in prime areas this year, in a rare sign of improving sentiment in a market that saw new home prices fall for the last eight months of 2014.
Luxury property sales took a hit last year as China's anti-corruption campaign discouraged conspicuous consumption, but buyers are now taking advantage of easier credit and a stock market rally to upgrade their homes.
Some developers are starting to raise prices in major cities, following the central bank's surprise November rate cut and its decision this month to lower the amounts lenders must hold as reserves as Beijing tries to revitalize an economy growing at its slowest rate in more than two decades.
The high-end trend is unlikely to spill over into the broader market just yet, however, due to a glut of unsold homes.
"It's not going to lead to a full recovery in the market," said Clement Luk, Shanghai-based chief executive officer for eastern China at property agency Centaline.
"Liquidity is more loose compared with a year ago, but the market doesn't have the environment for a big price hike because there's still a lot of inventory and there's no apparent improvement in the macro economy."
China Resources Land (1109.HK: Quote), Franshion Properties (0817.HK: Quote) and China Merchants Property 000024.SZ are all planning to hike prices for some of their new projects in prime areas this year, according to company officials who asked not to be named as they were not authorized to speak to the media.