China's first-tier cities are continuing to show signs of property market stabilization, with Shanghai emerging as the strongest performer in the first half of this year.
Shanghai's housing market has continued to improve, maintaining strong momentum since the end of last year. Official data showed that the amount of residential space sold in Shanghai surged by 17 percent year on year to over 13 million square meters in the first half. Among these, new home sales remained steady at 3.3 million square meters, while pre-owned home transactions jumped 24 percent to 9.9 million square meters.
"The housing market showed great performance in the traditional peak season in March and April. Though in the second quarter the momentum showed signs of weakening, the market is running just as we expected. With more sales campaigns coming out in June, the overall transaction volume was quite good. Especially the second-hand home transactions in the first half, it marked the highest level in recent years. Such great vitality in the market came thanks to the real estate policy package rolled out previously," said Lu Wenxi, a market analyst of Centaline Property Shanghai.
The sales increases in the pre-owned home market have made many agencies in the city busy. Many now report more potential buyers are coming in to look things over. The biggest concern for a homebuyer has also changed a lot.
"Previously, people usually focused on things like the price, the layout as well as the usable area ratio. But now their biggest concern seems to have shifted to things like how old the house is, property management and supporting facilities. The trend has really emerged this year," said Sun Maoxin, director of Lianjia Lianyang Branch.
As this year's Government Work Report highlighted the importance of stabilizing the property market, more supportive policies were introduced in the first half, from easing restrictions on home purchases to reducing down payment ratios. Housing experts suggest that additional measures are likely to be launched at both local and central government levels to boost demand.
"There are many preferential policies focusing on cutting mortgage rates to encourage more home purchases. We can see the rate is now at a very low level. Many home buyers nationwide have already enjoyed a mortgage rate lower than three percent. That has strongly eased the financial burden on homebuyers," said Lu.
The central bank on Monday announced its five-year loan prime rate for July which mainly affects mortgage loans, and it will remain unchanged at 3.5 percent. That rate experienced its first cut of this year in May and experts say that a further cut in the cost of mortgages this year could encourage more home purchases, primarily for first-time buyers in first-tier cities.
Pre-owned home sales drive Shanghai's housing market boom in H1
