City continues to regulate property market

Shanghai took another step on Friday in its continued effort to regulate the property market.

Beginning today, the list price of every pre-owned home must be verified by the local industry watchdog based on the normal range, and those that fail to pass the verification will not be allowed to get a public listing for sale, the Shanghai Housing Administration Bureau decided during a meeting held this morning. 

Prior to this change, no price-related information was subject to verification by the watchdog, which usually verifies the authenticity of a property such as whether it really exists or not.

The latest move follows a batch of tightening measures introduced by the city government in March to rein in runaway housing prices and fix irregularities.

A notice issued in early March by the city's housing administration bureau called for strengthened supervision of property brokerages, strict verification of information related to existing homes before their listing on the market and bans on hype that disrupts market orders, among other measures.

Sales of existing homes posted a major rebound in Shanghai during the first half of 2021, partly due to the release of pent-up demand after the coronavirus outbreak, as well as panic buying spilled over from the new housing market where a point system has been adopted to curb speculation, according to the latest market data.

Citywide, about 180,000 pre-owned homes changed hands during the six-month period that ended June 30, compared with around 111,000 units sold during the same period a year ago, according to Shanghai Homelink Real Estate Agency's regular report released on Thursday.

By value, existing homes worth a total of 605.7 billion yuan (US$93.3 billion) were sold, compared with 349.2 billion yuan recorded between January and June 2020.

In June alone, some 28,000 units of existing homes, valued at 94.1 billion yuan, were sold across the city, a month-over-month increase of 10 percent and 12 percent, respectively.

Existing homes sold for an average of 3.37 million yuan, or 41,269 yuan per square meter, up 2 percent and 5 percent respectively from May, Homelink data showed.

"Transaction volume should probably hover around the current level in the coming few months if there is no major change on the policy side," said Yang Yulei, a senior analyst with Homelink. "We actually don't foresee any impetus for the market to gain further momentum soon."