Home-buy­ing sen­ti­ments peak in city

The num­ber of peo­ple plan­ning to buy an apart­ment in Shang­hai hits the high­est since 2009, sur­vey says

China Daily (Canada) - - SHANGHAI - By WANG YING in Shang­hai


Heated prop­erty trad­ing in 2015 has el­e­vated the home­buy­ing in­ten­tions of con­sumers in Shang­hai to a six-year high, ac­cord­ing to a re­port jointly pub­lished by the Shang­hai Univer­sity of Fi­nance and Eco­nom­ics and the na­tional fi­nan­cial in­for­ma­tion cen­ter un­der the Xin­hua News Agency.

The sur­vey con­ducted in Shang­hai showed that the in­dex, de­not­ing the num­ber of peo­ple look­ing to buy an apart­ment, rose 6.8 points from the pre­vi­ous quar­ter to 65.9 points in the fourth quar­ter of 2015, up 14.1 points yearon-year. The re­port has been pub­lished quar­terly since the third quar­ter of 2007, based on in­ter­views with 1,000 peo­ple of dif­fer­ent ages and in­come groups for each sur­vey.

Xu Guox­i­ang, who heads the team in charge of the re­port, noted that al­though the in­dex was the high­est since 2009, it is still con­sid­ered “pes­simistic”. The re­port uses an in­dex that ranges be­tween 0 and 200 where read­ings below 100 points in­di­cate un­fa­vor­able sen­ti­ments.

Among the con­sumers polled, 24.5 per­cent be­lieve that now is the right time to buy a home, while 26.7 per­cent said that they would make a de­ci­sion on home-buy­ing within the next six months. Both show an in­crease from a quar­ter and a year ear­lier

The rise in pos­i­tive sen­ti­ments has re­sulted mainly from the rigid de­mand for homes as well as the loos­en­ing of the real es­tate pol­icy in the past year, said Xu, who is a pro­fes­sor from the Shang­hai Univer­sity of Fi­nance and Eco­nom­ics.

Im­prove­ments to mar­ket liq­uid­ity were also found to have pro­vided more sup­port to the per­for­mance of hous­ing sales in first-tier cities in­clud­ing Shang­hai. A to­tal of 14.79 mil­lion square me­ters of res­i­den­tial prop­er­ties were traded through­out 2015, ris­ing 52 per­cent year-on-year, and their to­tal value soared 78 per­cent to 469.7 bil­lion yuan ($71.4 bil­lion) com­pared with the pre­vi­ous year, said Ding Zuyu, ex­ec­u­tive pres­i­dent of E-House (China) Hold­ings Ltd.

“Shang­hai’s res­i­den­tial mar­ket has gone from strength to strength in 2015, and this trend is ex­pected to con­tinue in 2016. The mar­ket has re­ceived a sig­nif­i­cant boost from the low­er­ing of in­ter­est rates and the re­fo­cus­ing of in­vest­ment and de­vel­op­ment in first-tier cities dur­ing times of mar­ket un­cer­tainty,” said James Macdon­ald, Sav­ills re­search head, China.

But Chen Jie, a pro­fes­sor from the Shang­hai Univer­sity of Fi­nance and Eco­nom­ics, sug­gested that home buy­ers ex­er­cise more pru­dence.

“The les­son to learn from the volatile stock mar­ket is that there are risks for ev­ery in­vest­ment, even when the mar­ket is on the rise,” said Chen, re­fer­ring to how the Shang­hai Com­pos­ite In­dex nose­dived 45 per­cent be­tween June 15 and Au­gust 26 in 2015.

Look­ing ahead, Frank Chen, ex­ec­u­tive di­rec­tor, head of CBRE re­search, China, ex­pects the res­i­den­tial sec­tor to face more chal­lenges in 2016.

“Two fac­tors, in par­tic­u­lar, are likely to pose sig­nif­i­cant chal­lenges: In­flated hous­ing prices in ma­jor cities that weaken buyer af­ford­abil­ity, and the ef­fect of the US dol­lar rate hike to limit ad­di­tional room for mon­e­tary and credit stim­u­lus in China,” said Chen.

“Look­ing ahead, we urge the govern­ment to roll out poli­cies to ad­dress the high in­ven­tory lev­els in low-tier cities and curb the rapidly in­creas­ing rate of hous­ing prices in first­tier cities.”



say Shang­hai's res­i­den­tial mar­ket will con­tinue to rise but also face some chal­lenges in 2016.

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