With robust demand, Shanghai’s property cooling measures are unlikely to last
Analysts say the measures have dampened recent transactions but the demand for flats in the city remain strong and is only a matter of time when they are phased out
In Shanghai, any amount of austerity measures to cool the Shanghai home market will likely be short-lived as there’s one factor they can’t beat — the robust and sustainable housing demand.
Authorities in the mainland’s commercial capital has rolled out a series of stringent measures from home purchase restrictions and heightened mortgage down payments to price interventions since early 2016. But the local real estate market looks set to veer off course owing to soaring demand from first-time homebuyers and wealthy residents planning to upgrade to a bigger flat.
“In Shanghai, demand for homes is always strong,” said Luo Ruzhao, a vice president at Wenzhou Yijiayi Real Estate Agency.
“The recent drop in transactions was just a result of the tightened policies.”
The recent drop in transactions was just a result of the tightened policies
A total of 28,442 newly-built homes, most of which are located in the suburban areas, were sold in Shanghai during the first half of this year, down 40.4 per cent from the same period in 2016, according to real estate agency Homelink, also known as Lianjia.
Transactions of the city’s pre-owned residential flats in the first six months fell 55 per cent from a year earlier.