NEW home transactions more than halved in the first six months of this year in Shanghai as toughest ever rein-in measures to cool down overheated housing market proved effective.
Sales of new residential properties, excluding government-subsidized affordable housing, totaled 3.57 million square meters, or around 29,300 units, between January and June, a plunge of 52.8 percent, or 51.8 percent, from same period a year ago, Shanghai Homelink Real Estate Agency Co said in a report released today.
In June alone, some 686,100 square meters of new homes were sold across the city, a decrease of 3.4 percent from May and a drop of 45.1 percent from same period a year earlier, according to Homelink data. Some 620,300 square meters of new houses were released to the local market during the same period, a retreat of 15.2 percent from May.
"While approaching the end of the first half, June would usually see a notable jump in property sales as many real estate developers gear up for better six-month results," Homelink, the largest pre-occupied house brokerage chain in Shanghai, said in the report. "However, this year's figure was actually the worst June data registered in the city since 2011."
As a matter of fact, in four of the past seven years, new home sales exceeded 1 million square meters in Shanghai in June, with 2015 topping all with monthly transaction reaching more than 1.47 million square meters. Even in low years of 2011 and 2014, June data both exceeded 700,000 square meters, according to Homelink.
"The continuously slack performance we saw in the local housing market was mainly a result of tightening measures which have been greatly damping the sentiment of potential buyers," Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co. "Developers are expected to encounter increasing pressure in the second half to recoup cash following very poor performance in the first six months."
Widely enforced restrictions to quell demand from both speculators and upgraders, including stricter home purchase curbs, higher down-payment requirement and mortgage rate, have been blamed for slower home sales in Shanghai as well as other first and major second-tier cities where home prices have jumped rapidly to an unaffordably high level for ordinary wage earners.
--source from Shanghai Daily
