China
’s housing market is showing some signs of bounce. During the second week of March, the trading volume of Shanghai’s commercial residential housing hit a new high for the past 70 weeks, equaling its level in October, 2007, when the housing market was at a peak. The housing market in Shenzhen has been climbing for three months.
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E-House China’s CRIC system, which released this information, believes that the cutting of tax ratio and interest rates has lowered housing purchasing costs since the end of last year and stimulated demand. Meanwhile, the government is also promoting urban redevelopment, which may also be stimulating the market, and investors are looking for fire sale prices. Together, these are boosting Shanghai’s housing market to its recent high.
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E-House China predicts Shanghai’s housing market may continue to rise in the next three months but may then fall again. Some single housing projects which are lifting their prices, but most developers are maintaining current prices or lowering them. Â
Sales of commercial residential housing in Shanghai totaled 0.3238 million square meters last week, up 38.3% over the previous week and a new high over the past 70 weeks. The average sales price was 12,507 yuan per square meter, up 7% over the previous week, due mainly to the sales of 112 lease contract hotel apartments on March 10 in Gubei, Changning District, where the average sales price of 42 of these apartments reached 27,740 yuan per square meter.
According to a survey by Midland, a real estate service agency, among 500 potential clients aging from 25 to 65, over 60% plan to buy housing within a year. A similar Midland survey in September, 2008, showed only 37% of potential buyers planned to buy housing in one to three years, and 17% in three to five years, so buyers now are closer to the market. This may be because the government’s stimulus policies have begun to work. Â
January, which is normally an off season for the real estate market, marked a surprisingly good beginning for the real estate market in Shenzhen. Over January and February, trading volumes of new housing grew 174.85% over the same period in 2008. Excess purchasing power accumulated in 2008 seems to have led to this round’s boom.
According to statistics from Shenzhen Real Estate Research Center, the two months�trading volume grew while prices were decreasing. The average sales price dropped by 27.26% year on year to 11,175 yuan per square meter. At the same time, the volume of new housing reached 0.8872 million square meters, a growth of 174.85%. The real estate market rise in Shenzhen has continued into March.
Unlike the situation in 2007, this time most buyers are buying housing for themselves, instead for investment purposes. Sales volume of housing under 90 square meters reached 7,243 units, 73.5% of the total, while in 2007 and 2008 this number stood at 50.56% and 68.13%, respectively. Â
Shenzhen’s property market began to rebound cautiously in November. Since February this year, some developers have canceled discounts offered earlier and prices have stopped falling, even rising at some projects.
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