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Pre-owned homes in Shanghai see price drops, survey shows

By Cherry Cao | October 9, 2014, Thursday | Online Edition

SHANGHAI'S existing house index extended weakness for the fourth straight month in September, with prices of pre-owned homes dropping in almost all areas.

The index, which tracks month-over-month price changes, declined 0.86 percent, or 25 points, from August to 2,894, the Shanghai Existing House Index Office said in a latest report. That compared to a decrease of 0.71 percent in August.

"More than 90 percent of areas around the city monitored by our office witnessed price drops last month, compared to about 80 percent registered in August, serving as evidence for continuously slack sentiment in the market," said Chen Zhen from the index office. "While real estate developers began to provide some discounts to unload the inventory which remained at a high level, existing homes available for sale already fell below the 100,000-unit threshold."

By the end of September, local stock of previously-occupied houses stood at around 96,725 units in the city, a retreat of 6 percent form August and a drop of 21.3 percent from the beginning of this year, according to the index office.

In the new housing market, however, residential property available for sale has exceeded 12.5 million square meters, or over 83,800 units, in Shanghai as of today, according to the city's official real estate website fangdi.com.

Citywide, 122 out of the 130 areas tracked by the office saw price decrease from a month earlier. Two areas registered increases and the rest six remained little changed, the office said.

"We've noticed that the transaction volume of pre-owned homes climbed slowly in September with an increasing number of individual owners being willing to offer larger discounts to lure buyers though a meaningful recovery in the overall market is still yet to come," Chen said. "The central bank's recent decision to cut mortgage rates and minimum down payment levels for some home buyers may help boost momentum in October."

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