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Home » Business » Real Estate
Early price hikes may quash recovery of housing market
By Cao Qian |
March 21, 2009, Saturday
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Print Edition
Print Edition
LAST month's signs of a recovery in Shanghai's property market may be stifled as sellers have started to raise prices too soon, choking off demand, particularly in the mid and low-end sector, industry experts said yesterday.
"The amount of apartments - not including newly built apartments - being sold near the Middle and Outer Ring roads fell about 10 percent in the first half of this month, compared to the same period a month earlier," said Wu Tianhao, a district director at Shanghai Centaline Property Consultants Ltd, which runs about 150 real estate brokerages across the city. "Many home sellers have begun to raise their prices as the market recovered a bit."
Centaline statistics showed the transaction volume of second-hand homes across the city soared 138.6 percent last month from a month earlier, to 98,730 square meters. The rally was mainly due to robust demand after policies from the central and local governments helped reduce home-buying costs, though the date of Chinese New Year in January would also have had an effect. Property sales usually drop off during public holidays.
The average price of homes being sold was 13,727 yuan (US$2,009) a square meter in the first two months of this year. This is relatively low for Shanghai, indicating most of the homes being bought and sold were in suburban areas rather than downtown.
The rising volume of home sales, however, led owners to hike prices and the market has swung back into the doldrums. Since the market is still far from making a major recovery, price rises have led to a fall in transactions, industry insiders said.
However, the high-end sector - homes costing more than 25,000 yuan a square meter - has remained stable, even showing minor price increases in some areas, said experts.
"The high-end housing market didn't show such a rise in February as the low and mid-end market," said Huang Hetao, a researcher at Century 21 China Real Estate.
"Mid to low-end buyers were the driving force behind last month's rally. No major price changes have been seen in high-end downtown areas such as north Luwan, south Huangpu and Xujiahui, though Gubei witnessed some very small increases."
Century 21 research found that transaction volume of used homes doubled in the first two and a half months compared to the same period a year earlier and high-end apartments were sold at an average 10 to 16 percent less than a year ago.
"The amount of apartments - not including newly built apartments - being sold near the Middle and Outer Ring roads fell about 10 percent in the first half of this month, compared to the same period a month earlier," said Wu Tianhao, a district director at Shanghai Centaline Property Consultants Ltd, which runs about 150 real estate brokerages across the city. "Many home sellers have begun to raise their prices as the market recovered a bit."
Centaline statistics showed the transaction volume of second-hand homes across the city soared 138.6 percent last month from a month earlier, to 98,730 square meters. The rally was mainly due to robust demand after policies from the central and local governments helped reduce home-buying costs, though the date of Chinese New Year in January would also have had an effect. Property sales usually drop off during public holidays.
The average price of homes being sold was 13,727 yuan (US$2,009) a square meter in the first two months of this year. This is relatively low for Shanghai, indicating most of the homes being bought and sold were in suburban areas rather than downtown.
The rising volume of home sales, however, led owners to hike prices and the market has swung back into the doldrums. Since the market is still far from making a major recovery, price rises have led to a fall in transactions, industry insiders said.
However, the high-end sector - homes costing more than 25,000 yuan a square meter - has remained stable, even showing minor price increases in some areas, said experts.
"The high-end housing market didn't show such a rise in February as the low and mid-end market," said Huang Hetao, a researcher at Century 21 China Real Estate.
"Mid to low-end buyers were the driving force behind last month's rally. No major price changes have been seen in high-end downtown areas such as north Luwan, south Huangpu and Xujiahui, though Gubei witnessed some very small increases."
Century 21 research found that transaction volume of used homes doubled in the first two and a half months compared to the same period a year earlier and high-end apartments were sold at an average 10 to 16 percent less than a year ago.
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