Prices of used homes fall in Beijing and Shanghai
The secondary home markets in Beijing and Shanghai suffered an accelerating fall in prices but transactions picked up in August, the SCMP-CTC index shows.
The average price of used homes dropped 1.1 per cent to 40,463 yuan (HK$51,020) per square metre in Beijing, faster than July's decline of 0.8 per cent, according to the index, a collaboration between the South China Morning Post and Century 21 China Real Estate (CTC), a property consultancy.
Prices in Shanghai fell for a second month, by 1.6 per cent, to 34,098 yuan per square metre, quickening from July's drop of 0.3 per cent, the index shows.
As a result, the SCMP-CTC secondary home price index in Beijing fell to 154 last month from 156 in July. In Shanghai, it edged down to 141 from 143.
However, transaction volume in both cities picked up from a month earlier, by 3.3 per cent in Beijing and 5.2 per cent in Shanghai.
"Although Beijing and Shanghai haven't lifted home purchase restrictions, the market expectation is changing and there are signs of bottoming out," CTC said.
Relaxation in home purchase controls in almost 40 other cities has helped warm up sentiment in the two first-tier cities and buyers, including investors, are entering the market again.
Meanwhile, commercial banks have sped up mortgage loan approvals and even lowered rates, albeit at a much slower pace than analysts expected.
CTC said that although sales in the first week of September remained sluggish, developers would launch more new projects later this month at lower prices, which would attract end-users and those who always favoured property as their best investment option.
"Transactions in both primary and secondary homes will continue to improve in September," the consultancy said. "The market is almost at its bottom but there is currently no chance for a big rebound in both volume and price."
Compared with a year earlier, secondary home transactions in Shanghai were still down 40 per cent at 13,669 units while those in Beijing were 25 per cent lower at 9,453 units.
However, prices were 9.3 per cent higher than a year earlier in Shanghai and 1.4 per cent more expensive in Beijing.