Shenzhen home sales rose 66 per cent, hit 30-month high, according to April data

By Zheng / | May 16, 2019 12:25 PM SGT
Shenzhen home sales touched a record high in April amid falling mortgage rates, population influx and a cyclical upturn in sentiment, according to official data.
But industry analysts and agents were quick to point out the surge in April reflected mostly an increase in March and early April, when buyers returned to the market with an upbeat outlook and pushed up sales volumes. This is because of a lag between actual sales and official registration.
According to data from the official Shenzhen Real Estate Information Platform, 7,570 old homes changed hands in April, an increase of 66 per cent over the previous month and the highest monthly record since October 2016.
Less than 4,000 such homes were sold in the December to January period, while 5,500-6,000 units were sold in the same period a year ago, historical data shows.
"There was a marked uptick in sales volumes after Lunar New Year, when buyers dropped their wait-and-see attitude, spurred by lower mortgage rates, the government's proactive stance towards attracting talent and the newly unveiled plans for the Greater Bay Area," said Andy Lee Yiu-Chi, chief executive at Centaline Property for southern China.
The average price rose 0.9 per cent monthly to reach 52,787 yuan per square metre in April.
The sales of old homes are seen as more of an indicator of market sentiment than sales of new homes, whose sales and pricing are controlled by the government to a great extent.
Shenzhen is among the most lenient first-tier cities in China in terms of granting residency permits (hukou) to non-locals, a precondition for buying homes. Last year, it welcomed about 500,000 new residents, the largest among all Chinese cities.
Shenzhen is among China's most lenient first-tier cities when it comes to granting a residency permit, or hukou, a precondition for buying homes. Photo:
Most banks in Shenzhen have also reduced mortgage rates for first-time homebuyers since March, with the rate down to 5 per cent above the benchmark lending rate, from 15 per cent previously. The rate was raised to as much as 15 per cent above the benchmark rate mid last year, and had dampened the property market since.
Centaline's Lee and other property agents and analysts said the market for old homes had already peaked, with real-time transaction data showing declines since April. He said real-time transactions in April declined between 5 per cent and 10 per cent over March, but were higher than the second half of 2018, with prices barely changed.
He Qianru, chief analyst at brokerage Midland Holdings China, said: "Our proprietary data, which is ahead of official data, shows used home sales fell 20 per cent over March, and the volume has remained subdued in early May. Prices are stable."
Lee said: "Major factors constraining the Shenzhen property market have not been loosened, including curbs on non-hukou holders buying homes and a three-year resale ban. Speculative investors have receded."
The recent escalation in the US-China trade war could deepen the market's woes, as analysts fear it could hit the technology and export-oriented local economy and dent business sentiment.
On the other hand, the flare-up could also be a catalyst for property policy easing. "The trade war is the largest uncertainty," Lee said.