Shanghai maintained its top position in the rankings for real estate development and investment prospects among all Chinese mainland cities, followed by Shenzhen, Beijing, Guangzhou and Suzhou, Urban Land Institute, a global nonprofit research and education organization, said in a report released.

Shanghai, the most preferred city among survey respondents where average price for residential properties jumped one third during the 12-month period through June 2016, was singled out as "the only city in the Chinese mainland with liquidity for foreign investors," according to the Chinese Mainland Real Estate Markets 2016 report.

Shenzhen, where real estate market is mainly driven by IT and private equity sectors as most interviewees agree, has been registering the most robust momentum in the Chinese mainland over the past year with new home prices surging more than 47 percent, or the highest pace in the country, between June 2015 and June 2016.

Beijing is regarded one of the most preferred markets for institutional investors despite limited investment opportunities, or fewer tradable assets, compared to Shanghai.

"The four Tier 1 cities, led by Shanghai, continued to occupy the top four places in the rankings for development and investment prospects," said Kenneth Rhee, author of the report and the ULI chief representative for the Chinese mainland. "Loose monetary policy coupled with favorable housing policies such as the cancellation of home purchase restrictions nationwide except in the four gateway cities clearly contributed to a strong recovery in the country's real estate market over the past year."

While the residential sector is enjoying strong improvement, results for office, retail and logistics sectors seemed to be mixed.

The office markets in Tier 1 cities remained generally healthy but most Tier 2 and 3 cities continued to suffer from severe oversupply. The retail sector also suffered from a nationwide oversupply of both existing and planned shopping centers while on the logistics front, too much capital chasing investment opportunities and the difficulty of obtaining land parcels especially in Tier 1 cities has cooled some investors' enthusiasm, the report said.

(Source: shanghaidaily.com)