Home deals may fall up to 20% | Shanghai Daily

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August 22, 2009

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Home deals may fall up to 20%

THE transaction volume of existing homes in Shanghai could drop by as much as 20 percent in August as prices continued to climb, officials from major real estate brokerages said yesterday.

Data released by Century 21 China Real Estate, operator of the city's second-largest property chain, showed that the transactions of used houses fell 14 percent between August 1 and 19 compared with the same period a month earlier.

"Homes in areas including Qibao in Minhang, Shangda in Baoshan and Jiuting in Songjiang suffered the largest setback, or nearly 40 percent, so far this month," said Huang Hetao, a researcher at Century 21. "Across the city, the districts of Songjiang, Minhang, Huangpu, Xuhui and Luwan all recorded notable losses, about 20 percent on average."

The rising home prices and a reiteration of a strict mortgage condition by commercial banks had certainly hit buying sentiment, industry analysts said.

The city's banking regulator in late July emphasized that banks must insist on a 40 percent down payment on second homes as part of a move to weed out speculation in the property market.

"While average prices continued to edge up, the transaction volume of used houses at our branches fell by about 15 percent so far this month," said Shao Minghao, research head at Shanghai Hanyu Property Consulting Co Ltd. "We expect the loss to further extend to 20 percent in volume by the end of this month and the average prices of existing homes might rise 2 percent."

Hanyu's research revealed that deals involving used houses between the city's middle and outer ring roads dropped the most compared with others.

Shanghai's second-hand housing index, which monitors price fluctuations of existing homes, kept its rally in July for the fifth consecutive month.




 

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