Existing home market snaps four-month winning streak

Shanghai's existing housing market lost steam for the first time in four months as home seekers slowed their buying after the unleashing of pent-up demand, the latest industry data showed.

Citywide, about 28,000 pre-owned homes changed hands in June, a retreat of 3 percent from a month earlier. On a year-on-year basis, that number represented a 28 percent increase, Shanghai Homelink Real Estate Agency Co said in a regular monthly report released on Monday.

By value, existing homes worth a total of 92 billion yuan (US$13 billion) were sold, almost unchanged from May. That, meanwhile, marked 37 percent growth year over year.

"The insignificant withdrawal, which was the first of its kind since March, indicated that the market is continuing to digest the home buying demand that built up during the coronavirus outbreak, but at an eased pace," said Yang Yulei, a senior analyst with Homelink. "For the first half as a whole, about 11,000 units less were recorded in sales and we don't expect the market to fully catch up until the fourth quarter."

Over the first six months of 2020, about 112,000 existing homes, valued at some 351.1 billion yuan in total, were sold across the city, down 9 percent and 6 percent, respectively, from the same period a year ago. The average price of these homes hit 3.14 million yuan per unit, or 39,198 yuan per square meter, up 4 percent and 1 percent year on year, respectively, Homelink data showed.

In June alone, pre-occupied homes cost an average of 39,752 yuan per square meter, an increase of 2 percent from the previous month. In terms of unit price, they sold for around 3.3 million yuan each, a rise of 3 percent from May.

"A rather high transaction volume which indicated robust momentum among buyers, coupled with the recent launch of a batch of new projects with somewhat loosened price caps particularly in the high-end segment, jointly helped push up prices of existing homes in general at a mild and steady rate," Yang said. "As we have perceived, the price bargain room for pre-owned homes sold via Homelink fell to about 2.8 percent in the first half of 2020 from some 3.4 percent in 2019."

By area, Sanlin in the Pudong New Area, Pujiang in Minhang District and Nanqiao New City in Fengxian District were the most sought-after areas among pre-owned home seekers last month, with sales of 677, 637 and 580 homes, respectively, according to Homelink data.