2015’s tail end saw both supply and transaction volumes display a strong performance. Supply reached approximately 2.4 million square metres, while transaction volumes reached approximately 2.2 million square metres. Supported by growing demand, the first-hand residential price index registered an increase of 1.8% quarter-on-quarter (QoQ) and 8.3% year-on-year (YoY) by the end of December 2015.

Q4/2015 welcomed an influx of new supply for high-end markets, Savills reports new entries to the sales market of nine Grade A apartments (including new phases for existing projects) and eight high-end villas (including new phases for existing projects), contributing a total of 914 units and 374 units, respectively.

A push by developers to achieve sales targets saw Grade A apartment transaction volumes up 17.8% QoQ to 530 units. Meanwhile, the entry of a number of high quality projects saw average prices rise significantly to RMB 84,700 per square metre (sqm), representing a 12.6% QoQ and 23.9% YoY growth.

Result of the large amount of new supply this quarter, high-end villa transaction volumes increased by 37.6% QoQ to 417 units, while average prices grew 0.3% YoY to RMB 53,900 per sqm by the end of Q4/2015.

The government have outlined that resolving issues within the real estate industry is a key priority, it is expected that the coming year will continue to welcome the loosening of policies. As a result, it is forecasted that transaction volumes will continue to pick up and that prices will grow slightly throughout 2016. As reaffirmed by Jack Xiong, Savills Research & Consultancy,  “Residential land transactions are expected to continue to fetch high prices, which in effect will continue to support price appreciation in the high-end residential market.”

In summary, Beijing’s mass residential market remained positive in the last quarter of 2015 largely supported by stimulation policies from the government, followed by the loosening of housing loans and cutting of interest rates five times this year.

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