Residential housing market further contracts in Shanghai
January 23, 2018 Category China News Round-up, Weekly
The residential housing market in Shanghai continued to contract due to limited supplies and lending restrictions during the fourth quarter of 2017, according to real estate services provider JLL. The mass housing market and the luxury segment in the city recorded drops on a yearly basis. However, analysts expected the overall housing market in Shanghai to rebound slightly in 2018. Though the monetary policy will continue to remain tight, developers are likely to accelerate new launches in 2018 to ease rising cash flow pressures.
“Combined with the pent-up demand, sales may witness a slight rebound,” said Stephenie Zhou, head of project sales for JLL Shanghai. “However, prices are likely to be largely flat as policy restrictions are still in place,” she added. Lu Wenxi, Analyst with Shanghai Centaline Property, said that buyers are also becoming more rational. “Buyers are comparing the price and location of properties carefully. In the past, buyers would flock to projects with price appreciation out of fear that they would no longer be able to afford them if they wait. Those kind of buyers have disappeared”, said Lu.
Tight lending combined with limited supply and restrictive policies helped limit mass market sales to 8,851 units, down 47% year-on-year, while high-end sales fell to 150 units, down 19% quarter-on-quarter and 80% year-on-year. Despite slow sales through the year, inventory remained low at the end of 2017 due to limited supply. High-end inventories fell about 6% quarter-on-quarter and 27% year-on-year. As a result, prices stayed firm even with the slowdown in sales, the China Daily reports.
Housing markets in China’s 15 major cities were generally stable for another month in December as differentiated rein-in policies to curb speculation continued to take effect. Four of the 15 cities, including first-tier ones and key second-tier cities, saw decline in new home prices from November. Prices in three cities were flat from a month earlier, and the remaining eight posted month-on-month growth.
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