China's Gangnam Bulpae... Shanghai Shows Clear Recovery Despite Real Estate Crisis

Amid the ongoing slump in China's real estate market, Shanghai, known as the 'economic capital,' is showing signs of recovery on its own.

According to the China Residential Data Research Center on the 17th, the volume of second-hand home transactions in 10 major cities from June 10 to 16 this year was 16,089 units, a 6.28% decrease compared to the previous month. Among these cities, only four, including Shanghai, saw an increase in second-hand home transactions, with Shanghai recording 6,406 transactions, ranking first nationwide.

[Image source=AFP Yonhap News]

The number of online second-hand home sales in Shanghai has been steadily increasing since the Dragon Boat Festival holiday. On the 14th and 15th, 1,059 and 1,184 contracts were signed respectively, marking the highest number of second-hand home transactions nationwide.

In the trend of new home prices in 70 medium and large cities announced by the National Bureau of Statistics on the same day, Shanghai was the only first-tier city to show an upward trend. In May, new home prices in 70 medium and large cities in China fell by 0.7% month-on-month, the largest drop since October 2014 (0.8%). The year-on-year decline reached 4.3%.

New home prices in first-tier cities fell by 0.7% month-on-month, a larger drop than the 0.6% in April. Prices in Beijing, Guangzhou, and Shenzhen dropped between 0.8% and 1.4%, while new home prices in Shanghai actually rose by 0.6%.

Since April, Shanghai has been actively announcing policies to ease real estate regulations. Following a notice allowing the purchase of commercial housing outside the 5th Ring Road, in May, restrictions on real estate transactions for homeowners and non-local residents were relaxed. Additional home purchases were permitted for families with multiple children, and the burden of mortgage interest was eased. According to the service provider Lianjia, two months after these measures, as of the 16th of this month, the daily average number of new listings increased by 33%, and customer inquiries rose by about 44%.

A real estate agent in Shanghai explained, "Overall, transactions have increased compared to before the easing of regulations," adding, "Demanders who were previously observing the situation are now actively entering the market." The agent further noted, "Most purchases are for small homes, with interest focused on areas convenient for commuting."