Existing home sales slide but still solid

Shanghai's existing home sales suffered a notable setback in April, but still remained well above the normal level of around 20,000 units, according to market data released on Monday. 

Citywide, about 24,000 pre-owned homes changed hands last month, a retreat of 39 percent from March, Shanghai Homelink Real Estate Agency said in its latest monthly report.

By value, existing homes worth a total of 76.8 billion yuan were sold, a month-over-month plunge of 40 percent.

In April, existing homes sold for an average of 3.19 million yuan (US$496,000), or 39,695 yuan per square meter, down 1 percent and up 1 percent, respectively, from March.

"The city's existing housing market returned to a rather normal level last month, as panic buying largely eased among home seekers," said Yang Yulei, a senior analyst with Homelink. "The number of new clients continued to grow at a notable rate, though physical viewings handled by Homelink fell from a month earlier — probably a result of a structural imbalance as total inventory in the market was still ample."

Citywide, Nanqiao in Fengxian District, the core area of Jiading District and Huinan in the Pudong New Area were the most sought-after locations among pre-owned home seekers last month, with sales of 776, 535 and 503 homes respectively, according to Homelink.

Over the first four months of 2021, about 127,000 existing homes, with a total value of 427.8 billion yuan, were sold across the city. The average price of these homes was 3.37 million yuan, or 41,002 yuan per square meter.

"Regulatory measures to cool down the overheated market, coupled with continuing supply of new homes, helped relieve home buyers' anxiety," said Lu Wenxi, a senior researcher at Shanghai Centaline Property Consultants Co. "However, there is still limited room for buyers to bargain over prices with owners, as transaction volume was still well above 20,000 units."

Tightening policies imposed by both central and local governments include regulatory caps on banks' exposure to the property sector and mortgage loans, a new centralized land-sale initiative and a capital gains tax on the total sales price of a property if sold within five years of purchase, compared to the previous two-year threshold.