Shanghai’s hottest commodity is pre-owned flats as price curbs on new projects lead to scramble in secondary market

Name: Cheap housing but few economic opportunities for young Chinese in city along Russian border
Uploaded: 2021-06-22T05:33:13.000Z
Duration: 8 min 7 s
Description: Cheap housing but few economic opportunities for young Chinese in city along Russian border

New scoring mechanism has shut out some buyers from new project launches in Shanghai, sparking a scramble for pre-owned flats

Prices of pre-owned homes in Shanghai have risen every month since December 2019, making it the second-hottest market after Shenzhen

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Shanghai authorities have instituted a scoring system for new home sales to filter eligible buyers with sufficient points. Photo: SCMP

Daniel Renin Shanghai

Published: 1:33pm, 22 Jun 2021Updated: 6:52pm, 22 Jun 2021

A scarce supply of new homes in Shanghai and regulatory curbs have sparked a scramble among thousands of cash-rich buyers for high-end pre-owned flats in China’s financial hub, driving up the prices in secondary market to record highs.

Some of the homebuyers, falling victim to new administrative measures to disqualify buyers and cool a red-hot property market, had to pay an extra million of yuan to grab a pre-owned apartment in the city’s downtown areas.

“Due to a limited supply of new homes in prime locations and the city’s new policies, high-net-worth buyers are facing more difficulties in securing their dream houses,” said Shirley Tang, senior director of Savills Shanghai residential sales. “Surging prices in the pre-owned home market indicate demand for luxury and high-end homes is high.”

About 6,000 units at 18 residential projects in the city’s downtown Inner Ring Elevated Road will add to the market supply this year, according to data compiled by tech news app 36Kr. The downtown, which covers about 120 sq km, is equivalent to the combined area of Kowloon and Hong Kong Island.

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Cheap housing but few economic opportunities for young Chinese in city along Russian border

That addition is deemed insufficient to cater for demand in Shanghai, the mainland’s financial and commercial capital with a population of about 25 million, especially following a point-scoring system that has disqualified many from buying new homes.

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