In Shanghai, about 22,000 second-hand homes changed hands between March 1 and 23, up 170% from the same period a month earlier (Photo: Shutterstock)
Transactions of pre-owned homes in major Chinese cities led by Shanghai surged in March, fuelling expectations that the country’s embattled property sector may be stabilising.
Analysts and brokers said a more active resale market pointed to a gradual return of confidence among homebuyers after a three-year downturn.
In Shanghai, about 22,000 second-hand homes changed hands between March 1 and 23, up 170% from the same period a month earlier, according to data from local financial outlet Cailian. Full-month transactions are expected to exceed the key 30,000-unit mark, which would represent a three-year high.
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Momentum has been broad-based. Huatai Securities said transactions of pre-owned homes across 26 cities it tracks rose 22% y-o-y after the Chinese New Year holidays in mid-February.
In China’s four top-tier cities — Shanghai, Beijing, Guangzhou and Shenzhen — volumes increased by about 20% over the same period.
In Nanjing, capital of Jiangsu province, official data showed 5,789 second-hand homes were sold in the first three weeks of March, up 54% from a year earlier.
China’s property market began to contract in late 2020 after Beijing introduced measures to curb excessive leverage among developers and reduce financial risks, bringing an end to three decades of rapid expansion.
Economists have warned that sustained weakness in housing could continue to weigh on consumption.
In November, Yu Xiangrong, Citigroup’s chief economist for Greater China, said stronger stimulus would be needed to arrest the decline, noting that falling home prices tended to dampen spending on big-ticket items such as cars and appliances.
“A functional secondary market brings more participants into the market, reinforcing the stability of newly discovered transaction prices,” Michelle Kwok, head of HSBC’s Asia real estate and Hong Kong equity research, said in a recent report.
“This matters because confidence is not restored by policy headlines alone. It is restored when homebuyers or sellers can see their most important financial decision is feasible again at transparent clearing prices,” she added.
Policy support has started to filter through. In February, Shanghai rolled out further easing measures, including loosening home purchase restrictions and offering tax exemptions, prompting renewed interest from buyers.
“Would-be homebuyers with strong housing demand took a cue from the policies, as many of them believed it was time to make their purchase decisions,” said Zhu Xinhai, a sales manager at 5i5j Real Estate Brokerage.
“Non-locals, particularly young people, who relocated from other parts of the country to Shanghai, are now actively looking for the right purchase targets,” Zhu added.
Recent transactions had been concentrated at the lower end, with roughly two-thirds of homes sold priced below RMB3 million (about $560,000), according to local agents. By contrast, a typical two-bedroom flat within Shanghai’s inner ring can cost at least RMB6 million.
Prices for second-hand homes have remained broadly flat in recent weeks, but agents said rising demand could start to push them higher. Still, any recovery is likely to be measured.
“The market won’t return to pre-2020 levels any time soon,” said Song Yulin, a senior manager at Lianjia, a property agency in Shanghai. “But some buyers are willing to raise their offers to get deals done.”
HSBC noted that a decline in listings of second-hand homes in major cities since December suggested sellers were under less pressure to exit, while buyers were becoming more prepared to transact.
The property sector and related industries — from construction to home appliances — account for roughly a quarter of China’s economic output, meaning even a modest recovery could have wider implications for growth.
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