A chill descends over Shenzhen’s formerly red-hot housing market
Fall in transaction volumes in March may signal turning point in mainland China’s most expensive housing market
The skyrocketing Shenzhen housing market cooled off in March as transaction volumes saw a marked slowdown, signalling an abrupt turn in market sentiment.
Total transactions by area in the nation’s most expensive city decreased 24 per cent to 89,400 square metres last week over the prior week, and fell 10 per cent year on year, according to China Index Academy. That compares to at least 25 per cent year on year growth in three other first-tier cities of Beijing, Shanghai and Guangzhou.
Over the weekend, mainland publication The Paper reported that second hand home prices were falling, citing the example of a flat that recently sold for a 2 million yuan (HK$2.4 million) discount, representing a 12 per cent cut in price, as the investor who bought the property wanted to cash out as soon as possible.
“The sell off in the second hand market is an important signal to the market, and that can spread to primary market,” said Han Shitong, deputy director of the Guangdong Real Estate Industrial Research Association.
Now prices have gone far beyond the level an average person can afford
Home prices in Shenzhen surged over the past year with official data showing that new home prices in February jumped as much as 57.8 per cent year on year.
arket watchers point out that speculative practises flooded into the Shenzhen market, increasing leverage risk. In response, the city’s top policy makers admitted prices rose “too fast” and issued a warning last month of possible tightening measures to come.