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Property tightening measures continue to bite in Shanghai

SALES of existing homes fell at a faster pace in Shanghai last month as rein-in measures continued to bite.

Across the city, some 13,580 units of pre-occupied houses changed hands in December, a month-over-month drop of 32.4 percent. That compared to a 21.7-percent decrease registered in November, according to data compiled by Shanghai Centaline Property Consultants Co.

"The latest tightening measures introduced on November 28 could have reduced the number of potential buyers by more than 50 percent, while many of the rest home seekers chose to take a wait-and-see attitude despite price discounts provided by home owners," said  Lu Wenxi, a senior manager of research at Centaline. "The downward trend will surely continue through the end of this month while it is a bit early to say if there might be a rebound after the Spring Festival holiday."

According to Centaline, which runs one of the largest estate chains in Shanghai, many individual home owners are now offering a discount of between 5 and 6 percent and around 8 percent for high-end and luxury units to lure buyers.

Considered the toughest of its kind ever implemented in the city, Shanghai raised the down payment for first-time buyers from 30 percent to 35 percent and levied a stricter definition of second-time buyers who have to pay a minimum 50 percent or 70 percent down payment.

Separately, Shanghai's existing housing index, which tracks monthly price changes in 130 areas, fell 0.21 percent to 3,996 in December, the first month-over-month decrease in more than two years, Shanghai Existing House Index Office said earlier.

Prices of pre-owned homes rose in 58 areas from a month earlier while they fell in 47 areas and were flat in the remaining 25 areas, the office said.


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