Housing market to 'remain stable'

Cao Qian
Real estate consultancy Savills predicts a gradual and moderate improvement this year compared with 2019 along with intense competition in the high-end market.
Cao Qian

Shanghai's new residential housing market will probably remain stable in 2020 along with a gradual and moderate improvement over 2019, international real estate consultancy Savills said in its latest research.

"The city's new housing market went through a sort of consolidation last year with insignificant changes in new supply and average price but a more notable growth in transaction area," said James Macdonald, senior director and head of Savills China research. "Looking forward, we expect to see more buyers come back to the market which will possibly result in a slow but steady increase in price, mainly fueled by a bounce in average transaction price in the last quarter of 2019 as well as signs that policies are unlikely to tighten further in 2020."

Between January and December 2019, new home supply in Shanghai fell 6 percent year on year to 7.77 million square meters while the average price edged up 1.3 percent from 2018 to some 53,900 yuan (US$7,791) per square meter. Sales by area, meanwhile, rose 19 percent from the previous 12-month period to about 7.73 million square meters, according to Savills.

This year the high-end segment will see particularly intense competition mainly due to ample supply.

At least 14 projects, or more than 2,900 units, of new apartments in the high-end segment are expected to be rolled out to the local market in 2020, according to Savills. That compares with 2,810 units launched across the city in 2019.

Last year, transaction volume of new apartments with a price tag of 100,000 yuan per square meter and above rose 40 percent in Shanghai from 2018 and those between 150 square meters and 200 square meters took a 42 percent share of the total, making them the most sought-after type among buyers, Savills data showed.

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