The Chinese real estate market shows little sign of recovery. Although the government has introduced sporadic stimulus measures, it seems difficult to drive the weakened market.
On the 14th, China’s Pengpai Newspaper cited a report from Shanghai Lianjia Research Institute, a research organization of the real estate brokerage firm Lianjia, stating that the number of newly traded commercial housing units in Shanghai in January this year was 3,786, down 44% from the previous month and 55% from the same period last year.
Based on transaction value, it was 29 billion yuan, down 47% from the previous month and 58% from the previous year. The average unit transaction price also fell. The transaction price per square meter was 7.64 million yuan, down 6% from the previous month and 7% from the previous year. The top regions by transaction volume were Pudong (1,226 units), Jiading (567 units), and Minxing (447 units).
The Shanghai Lianjia Research Institute diagnosed that "not only is supply decreasing, but the Spring Festival is approaching, which is traditionally considered an off-season," and that "the decline in transactions is a normal phenomenon." According to Lianjia Research Institute’s survey data, the supply of new housing in Shanghai in January was at a low level with 3,256 units.
Earlier, on the 7th of last month, Shanghai announced its first commercial residential projects of the year, planning to supply 4,335 units through a total of 22 projects, with a total area of 524,200 square meters.
Yang Weilei, chief analyst at Shanghai Lianjia Research Institute, said, "Policies to optimize the real estate market were introduced in January," adding, "Favorable policies will continue to support the market, and transaction volumes will recover in an orderly manner after the Spring Festival."
However, the real estate policies in major cities like Shanghai only began to ease in earnest from last September. At that time, Shanghai introduced a measure that if a buyer does not own a home under their name, the purchase is considered a first home purchase regardless of loan records. Then, in December, the down payment ratio for first home purchases was uniformly lowered to 30%, and for second home purchases, it was reduced to as low as 40%. In addition, the standards for general housing were significantly raised, and the maximum repayment period for individual mortgage loans was extended to up to 30 years.
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