Home sales plummet but prices high as government curbs take hold
Source: Shanghai Daily |
February 26, 2011, Saturday
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Print Edition
Print Edition
FEWER than 100 new homes were sold in Minhang between January 28, when the ban on third or greater mortgages came into effect, and February 16.
Minhang is feeling the sting of the latest round of government curbs aimed at reining in a speculative property bubble. Home sales are plummeting.
A combination of decisions by national and municipal governments is making it harder to buy home units. Interest rates and mortgage down payments have been raised. Shanghai introduced its first property tax, and the city has banned mortgage lending to consumers who already own at least two homes.
Despite restrictions, housing prices remain stubbornly high. The average price in January rose slightly from December. The Longbai area led the gains with an increase of 1.2 percent to 11,857 yuan (US$1,800) a square meter. Properties in Xinzhuang rose about half a percent to 12,829 yuan.
Fewer than 100 new homes were sold in Minhang between January 28, when the ban on third or greater mortgages came into effect, and February 16, according to statistics from the Minhang Real Estate Center.
Last year, by contrast, an average 596 new home units were sold weekly.
Transactions completing the sale of 400 new homes in Minhang were recorded in the seven days ending February 16, the week after the Spring Festival holiday. The majority of those were initiated before the January 28 ban took effect.
One official at the real estate center said the market is currently undergoing a period of confusion and homebuyers are taking a wait-and-see attitude. It will take some time, he said, for the situation to settle.
Shanghai's new ban is aimed at local families who already own two or more houses and out-of-town families who already own one home in the city. As part of the crackdown measures, purchasers of second homes are required to make a 60 percent down payment on mortgages. There is also a tax on home bought by people who have lived in the city for less than three years.
Complicating the market is Shanghai's plan of imposing a pilot project property tax. The tax is based on a ratio of square meters per household occupant. It falls heaviest on those with more abundant living space. All homes owned by a person are included in the calculation. With the outlook so unclear, many homeowners who had planned to sell properties are now leasing them out instead, according to one staffer at the Luoyang branch of the Centaline Property.
He said more than 80 percent of customers visiting the branch want to rent, an increase of 10 percent from just prior to Spring Festival.
He cited the example of one migrant couple who had planned to buy a new home in Shanghai but changed their minds after the new policies were implemented. They decided to rent instead and wait the market out, he said.
Rents in the district shot up 10 percent on average after the festival, said a staffer at the Zhuhang Branch of Hongmin Property Co.
He cited the example of apartment in the Meilong area that was renting for 4,200 yuan a month before the festival but has since gone up 300 yuan.
Minhang is feeling the sting of the latest round of government curbs aimed at reining in a speculative property bubble. Home sales are plummeting.
A combination of decisions by national and municipal governments is making it harder to buy home units. Interest rates and mortgage down payments have been raised. Shanghai introduced its first property tax, and the city has banned mortgage lending to consumers who already own at least two homes.
Despite restrictions, housing prices remain stubbornly high. The average price in January rose slightly from December. The Longbai area led the gains with an increase of 1.2 percent to 11,857 yuan (US$1,800) a square meter. Properties in Xinzhuang rose about half a percent to 12,829 yuan.
Fewer than 100 new homes were sold in Minhang between January 28, when the ban on third or greater mortgages came into effect, and February 16, according to statistics from the Minhang Real Estate Center.
Last year, by contrast, an average 596 new home units were sold weekly.
Transactions completing the sale of 400 new homes in Minhang were recorded in the seven days ending February 16, the week after the Spring Festival holiday. The majority of those were initiated before the January 28 ban took effect.
One official at the real estate center said the market is currently undergoing a period of confusion and homebuyers are taking a wait-and-see attitude. It will take some time, he said, for the situation to settle.
Shanghai's new ban is aimed at local families who already own two or more houses and out-of-town families who already own one home in the city. As part of the crackdown measures, purchasers of second homes are required to make a 60 percent down payment on mortgages. There is also a tax on home bought by people who have lived in the city for less than three years.
Complicating the market is Shanghai's plan of imposing a pilot project property tax. The tax is based on a ratio of square meters per household occupant. It falls heaviest on those with more abundant living space. All homes owned by a person are included in the calculation. With the outlook so unclear, many homeowners who had planned to sell properties are now leasing them out instead, according to one staffer at the Luoyang branch of the Centaline Property.
He said more than 80 percent of customers visiting the branch want to rent, an increase of 10 percent from just prior to Spring Festival.
He cited the example of one migrant couple who had planned to buy a new home in Shanghai but changed their minds after the new policies were implemented. They decided to rent instead and wait the market out, he said.
Rents in the district shot up 10 percent on average after the festival, said a staffer at the Zhuhang Branch of Hongmin Property Co.
He cited the example of apartment in the Meilong area that was renting for 4,200 yuan a month before the festival but has since gone up 300 yuan.
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