Shanghai's existing home market resilient despite sales decline

Shanghai's existing home market continued to show some signs of resilience in September despite a moderate retreat in sales, with demand for housing-upgrade increasingly strong.

Citywide, some 18,000 lived-in homes, valued at around 60.8 billion yuan (US$8.53 billion) in total, changed hands last month, a fall of 6 percent and 7 percent, respectively, from August, according to latest data from Shanghai Homelink Real Estate Agency Co.

"Taking into account the overall market environment, the September volume was not bad actually," said Yang Yulei, a senior analyst with Homelink. "From the price perspective, it was also pretty stable compared with the prior (COVID-19) lockdown period."

The average cost of an existing home was 3.3 million yuan in September, a dip of 2 percent from August.

By district, the Pudong New Area as well as Baoshan and Minhang districts outperformed their counterparts as the three favorite options among existing home seekers.

By area, Nanqiao in suburban Fengxian District, Zhoukang in Pudong and the core area of suburban Jiading District continued to be the most sought-after places, registering transactions of 478, 473 and 437 units, respectively, Homelink data showed.

For the first three quarters of 2022, around 115,000 units of lived-in homes valued at 369 billion yuan were sold around the city, a drop of 52 percent and 50 percent, respectively, from the same period a year ago, continuing to improve from the decrease of 56 percent and 58 percent registered in the first eight months.

On average, existing homes sold for 3.22 million yuan per unit during the January-September period, down 4 percent annually.

Looking forward, Yang said she expects to see continuous improvement in buyer sentiment as a slew of initiatives introduced recently by the central government, including easing mortgage rate floors, cutting the interest rate on provident fund loans and offering individual income tax rebates for home buyers, would hopefully boost market demand further.