SALES of pre-owned homes continued to fall in Shanghai last month with no signs for a significant recovery anytime soon.
About 9,420 units of pre-occupied houses changed hands in January in the city, a month-on-month decline of 30.6 percent and a plunge of 78.8 percent from the same month a year
ago, according to data compiled by Shanghai Centaline Property Consultants Co. That followed a 32.4 percent drop in December and a 21.7 percent fall in November.
“The weakness should probably extend for another six months at least amid an increasingly prevalent wait-and-see sentiment among home seekers,” said Lu Wenxi, a senior manager
of research at Centaline. “It is also very likely that we won’t see a major rebound until September if the general economic conditions don’t improve much.”
The weeklong Spring Festival holiday as well as tightening measures implemented by the local government since late November left the city’s housing market almost frozen last
month with discounts by sellers not enough of an incentive to most home buyers.
An 8 percent discount is usually given in the high-end and luxury category while a 5 percent discount is what owners of medium and low-end apartments will offer, unchanged from
December, according to Centaline.
Pre-owned Shanghai property costing an average 30,000 yuan to 50,000 yuan (US$4,367 to US$7,278) per square meter were the most sought-after by home seekers, most of whom
upgraders, Lu said.
Since the introduction of the latest batch of rein-in policies, which include raised down payment for first-time buyers and a stricter definition of second-time buyers who face
a minimum 50 percent or 70 percent down payment, the local stock of homes available for buyers has also been falling steadily, which might cause the market to cool further.
--source from Shanghai Daily