Unleashed demand fuels further rise in existing home market

Cao Qian
About 29,000 pre-owned homes changed hands in May, up 16 percent month on month and 22 percent year on year, with pent-up demand being the biggest driver.
Cao Qian

Signs of recovery extended for another month in Shanghai's existing housing market as transaction volume jumped to a nearly three-year high, the latest industry data showed.

Citywide, about 29,000 pre-owned homes changed hands in May, a month-over-month increase of 16 percent. On a year-on-year basis, the number was up 22 percent, Shanghai Homelink Real Estate Agency Co said in a regular monthly report released on Monday.

By value, existing homes worth a total of 91.6 billion yuan (US$12.92 billion) were sold, an increase of 24 percent from April. That, meanwhile, represented 28 percent growth year over year.

"Pent-up demand remained the biggest driver of the market, but this level of strength might not be maintained for long," said Yang Yulei, a senior analyst with Homelink.

These pre-occupied homes cost an average of 39,152 yuan per square meter, an increase of 1 percent from the previous month. In terms of unit price, they sold for around 3.21 million yuan each, a notable rise of 7 percent from April, according to Homelink data.

By area, Luodian in Baoshan District, Sanlin in the Pudong New Area and Nanqiao New City in Fengxian District were the most sought-after areas among pre-owned home seekers, with sales of 711, 663 and 642 homes, respectively.

Over the first five months of 2020, about 84,000 existing homes, valued at some 259.7 billion yuan in total, were sold across the city, down 17 percent and 15 percent, respectively, from the same period a year ago. The average price of these homes hit 3.09 million yuan per unit, or 38,993 yuan per square meter, up 3 percent and 1 percent year on year, respectively, Homelink data showed.

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