SALES of pre-occupied homes more than halved in Shanghai last year while prices fluctuated moderately as local authorities strictly enforced tightening policies to quell speculation, hitting buyers’ sentiment.
The Shanghai Existing House Index Office said in a report today that stability would be the key word for 2018 as the rein-in policies are expected to be maintained.
Around the city, about 147,700 pre-owned houses changed hands in 2017, a plunge of 56.6 percent from 2016, the office said. In December, around 12,100 units of pre-owned homes were sold, up 5.2 percent from November and a year-on-year drop of 8.5 percent.
The index, which tracks month-over-month price changes in 130 areas, dipped 0.17 percent from November to 3,991 last month. That marked a year-over-year drop of 0.13 percent, according to the office.
“The monthly price index remained generally flat last year with only moderate fluctuations being recorded over the past 12 months,” the office said. “Looking forward, stability would be the key word for 2018 as no major relaxations on rein-in policies should be anticipated soon while the central government is stepping up its efforts to work on a long-term mechanism that aims to guarantee healthy development of the country’s real estate market.”
Meanwhile, pre-owned homes costing between 3 million yuan (US$459,467) and 5 million yuan took up 23.2 percent of the total sold in 2017. Those costing between 5 million yuan and 10 million yuan accounted for 10.1 percent while pre-occupied homes priced at over 10 million yuan grabbed nearly 3 percent, the office’s data showed.
Around 124,529 pre-owned homes were available for sale around the city by the end of December, a month-over-month fall of 6.1 percent and a year-over-year drop of 27.3 percent. By proximity to the city center, some 25,748 units were located within the Inner Ring Road, a fall of 7.5 percent. That compared to 63,400 units between the Inner and Outer Ring roads, down 6.2 percent, and 35,381 units beyond the Outer Ring Road, down 5.1 percent from the same time a year earlier.
“Continuously tight policies coupled with gradually changing expectations amid the government’s reiterated vows to increase rental supply have kept more home seekers on the sideline,” said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co. “As a result, more individual owners are starting to offer larger discounts to lure buyers if sluggish momentum continues to linger over the local market.”
Currently, buyers of pre-occupied homes could get a 3-to-5 percent discount for medium to low-end houses while a price cut of between 5 and 10 percent is often available for more expensive housing, according to Lu.