The boom in China's artificial intelligence (AI) semiconductor industry has led founders and executives of related high-tech companies to emerge as significant players in the real estate market. Analysts suggest that the substantial wealth generated by the AI sector is flowing into the high-end housing market, driving up prices for luxury properties and land in major cities.
According to the China Real Estate Information Corporation (CRIC), approximately 18,000 luxury homes priced over 10 million yuan (about $2.2 million) were sold in 35 major cities across the country in the first half of this year. Among these, 1,636 homes priced between 30 million and 50 million yuan (about $4.4 million to $7.4 million) were sold, marking a 38% increase compared to the same period last year. Additionally, 660 ultra-luxury homes priced above 50 million yuan saw an 11% rise.
Notably, the increase in luxury home sales has been particularly pronounced in Shenzhen, often referred to as China's Silicon Valley. In the first half of the year, 619 luxury homes priced over 30 million yuan were sold in Shenzhen, representing a staggering 250% increase year-on-year.
China's First Financial Daily reported that in the Nanshan and Qianhai districts of Shenzhen, high-end apartments priced in the tens of millions of yuan are selling out on their first day of sales.
A representative from a real estate development company selling luxury apartments in Shenzhen stated, "A significant portion of recent luxury home buyers are professionals in high-tech industries such as semiconductors and AI. Most buyers are entrepreneurs, executives, and key technology partners, with about 70% being in their 20s, born in the 1990s."
The demand for luxury homes is also spilling over into the land market. Recently, real estate developers in Shenzhen have been fiercely competing to secure land in areas densely populated with AI companies. A residential plot in Nanshan's Wehai area was sold for more than 150% above its expected price, setting a new record for land prices in Shenzhen at over 100,000 yuan (about $22,000) per square meter based on floor area ratio. Wehai is a key area where major Chinese high-tech companies like Tencent, Alibaba, ByteDance, and DJI are located.
Market observers view this trend as a new flow of wealth generated by the AI industry that is extending beyond a temporary preference for high-priced homes. With the Chinese government strategically nurturing the AI and semiconductor sectors and anticipating a wave of initial public offerings (IPOs) from related companies, expectations are high for the continued emergence of a new affluent class that will support both the luxury housing and land markets.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.