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October 14, 2021

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Used home sales tumble again

Momentum among buyers seeking pre-occupied homes slowed for the third straight month in Shanghai with transactions falling to a multi-year low, the latest industry data shows.

Citywide, approximately 12,000 pre-occupied homes changed hands in September, a monthly drop of 33 percent and a plunge of 61 percent from the same time a year ago, continuing August’s fall of 24 percent and 40 percent, Shanghai Homelink Real Estate Agency said in its recently released monthly report.

In terms of value, this represents existing homes worth 37.8 billion yuan (US$5.86 billion), down 34 percent from August and 66 percent from the prior-year period.

On average, existing homes sold for 3.13 million yuan per unit, down 2 percent monthly and 11 percent for the year.

“Despite continuously weakening sales numbers which were almost close to the level seen in the second half of 2017, home prices remained comparatively stable without a further backslide,” said Yang Yulei, a senior analyst with Homelink. “We expect to see prices remain at the current level for some time as there is no immediate sign of a recovery amid a shrinking supply of pre-occupied units on the market.”

A series of measures intended to rein in the trend were imposed earlier, mainly including verification of existing home prices and tightening mortgage loan approvals at commercial banks have effectively cooled down the red-hot property market through curbing both supply and demand.

Property viewings handled by Homelink, for instance, fell around 20 percent in September compared with June, Yang added.

Outlying areas remained the most sought-after places among home seekers with Nanqiao in Fengxian District, Huinan in the Pudong New Area, and the core area of Jiading District being the top three choices last month, with sales of 355, 300 and 274 homes respectively, according to Homelink.

In the first nine months of 2021, about 234,000 existing homes, with a total value of 782.8 billion yuan, were sold, up 16 percent and 19 percent from the same period a year ago.

The average price was 3.34 million yuan, an increase of 2 percent from the previous year.

A separate report by Shanghai Centaline Property showed new home sales, excluding government-subsidized affordable housing, fell 27.6 percent from August to 652,000 square meters in September amid a drop in new supply, a lower-than-expected volume

Only about 168,000 square meters of new residential properties were introduced into the market, a drop of 37.1 percent from the previous month.

“Falling below the 800,000-square-meter threshold was probably a clear signal that the new housing market cooled off,” said Lu Wenxi, a Centaline researcher.


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