High-end property market in Beijing will see a continual price rise due to growing demand, industrial experts said.
"Even under the policy restriction, high-end residential price in Beijing will still witness an increase in the long run due to stable demand," said Jane Deng, head of Residential Services in CBRE Northern China.
Residential demand is closely related to job opportunities, according to Virginia Huang, managing director of Advisory and Transaction Services in CBRE Greater China. The demand for commercial real estate is growing in cities with bigger job opportunities, which further drives residential price to go up, she said.
Under the context of urban renewal, Beijing, a central city with strong economy, complete infrastructure facilities and consistent job market strength in the nation, will continue to drive high-end residential demand in the city and its surrounding area in the long run, she said.
In the past year, Beijing's first-hand residential price has seen a 17.8 percent decline while second-hand residential price has seen a 34.8 percent surge, according to statistics from Cushman & Wakefield.
Second-hand residential transactions account for nearly 80 percent of overall transactions in Beijing's residential market, according to Wei Dong, head of Research Department in Cushman & Wakefield Northern China. Therefore, the trading market is still witnessing a substantial increase of price, she said.
Some of the major property developers in China are still optimistic about the prospect of the first-hand residential market in Beijing.
For instance, Cofco Property Group, Tian Heng Group, Cifi Group and Henderson Land Group have just joined hands to launch a high-end residential project in Beijing, aiming to grasp the opportunities in Beijing's high-end residential market.
"The project is born in the context of consumption upgrade, attracting many high-end consumers who are pursuing a high-quality life," said Kong Peng, managing director of Cifi Group in Beijing District. "Complete infrastructure facility and the abundance of educational and natural resources will become the project's major appeal for consumers."
According to a survey from China Jinmao, a major property developer, more than 70 percent of the customers are demanding more personalized resident environment, which includes the application of healthier and smarter housing design.
"In order to meet the growing demand, we plan to invest 5 billion yuan ($728 million) in the next five years in fostering unicorn enterprises in the fields of health and intelligent technology, aiming to build an industrial environment that facilitates the company's future development," said Li Congrui, CEO of China Jinmao.
According to an industry report from China Index Academy, the average sales premium rate of 10 major Chinese property developers, which is a key indicator of the extent to which property exceeds its nominal value, reached 31.9 percent in China's first-tier cities in 2018, indicating the profit advantage for property enterprises in China's major cities is still strong.
Fan Hang contributed to this story.