Shanghai lived-in home deals hit 20-month high
Transactions involving lived-in homes in Shanghai shot up in March as owners offered discounts to bargain hunters, but the outlook for the city’s housing market remains cloudy amid concerns over the bleak mainland economy.
The number of transactions hit a 20-month high, and 24,000 pre-owned flats changed hands last month in the financial hub. This tally was also 24 per cent higher than February’s level and 86 per cent above the period a year ago, according to property agency Lianjia.
The average price for lived-in homes rose by 2 per cent month on month to 40,560 yuan (HK$43,900) per square metre, and nearly 90 per cent of the transacted properties sported a price of less than 6 million yuan. Most are in areas away from the city centre.
“The jump in transactions resulted from the release of pent-up demand, as some owners reduced prices to meet interested buyers’ demands,” said Xie Jiaojiao, a senior sales manager with property agency 5I5J.
“But market sentiment became weak at the end of March, as would-be buyers expected further price cuts before making their purchase decisions.”
The prices of lived-in homes in Shanghai have slumped by more than 20 per cent from a peak in mid-2022 as a result of a property crisis that has seen dozens of developers face a capital crunch.
The crisis had also deterred residents from buying flats despite a strong desire for improving their housing conditions, said You Liangzhou, owner of Baonuo, a property agency in the city.
“In the absence of substantial policy support in Shanghai, most potential buyers will remain cautious because of a bearish view of the economy,” You said.
“All signs are showing a bull run in March will turn out to be short-lived. Now most buyers are taking a wait-and-see approach.”
The jump in transactions in Shanghai came after Hangzhou, the capital of Zhejiang province, eased home purchase restrictions in a drastic move to support a weak property sector after efforts last year failed to rejuvenate its housing market.
On March 14, Hangzhou said it would no longer impose eligibility criteria on people buying second homes in the city.
In the past, only qualified residents were allowed to buy houses in specific areas, subject to a limit.
The policy tweak reflected local governments’ desperation to bolster the property sector, which, along with related industries such as home appliances and construction materials, accounts for about a quarter of the mainland economy.
Currently, households in Shanghai are barred from owning a third flat under a measure introduced in 2011 to rein in the red-hot property market. The municipality has yet to lift the ban, according to two city officials with knowledge of the matter.
The prices of second-hand homes across 100 mainland cities fell by 4.8 per cent to 15,088 yuan per square metre on average in March from a year earlier, according to the China Index Academy, a property research firm. They slipped by 0.56 per cent from a month ago, extending a drop that started in April 2022.