Shanghai home sellers forced to offer big discounts as transaction volume slides amid bearish economic forecasts
- More homeowners in the metropolis are looking to cash out as they bet prices will fall further, property agent says
- The number of pre-owned flats up for sale in Shanghai surged from 100,000 in mid March to 200,000 at the end of April, according to Centaline
Homeowners in Shanghai hoping to sell their flats are offering discounts of up to 10 per cent to attract a dwindling population of would-be buyers amid a weak property market and bearish forecasts for the economy.
The home-selling spree under way in the mainland’s commercial and financial hub, which is likely to further depress prices, is the latest sign that mainland China’s property market is stuck in what some experts are calling a “death spiral”.
“More homeowners have decided to cash out because they are betting that home prices will continue to fall,” said Song Yulin, a senior manager with property agency Lianjia. “Some of them have made plans to migrate to foreign countries and they are happy with the current prices even if they have to offer a discount.”
About 200,000 pre-owned flats in Shanghai were up for sale at the end of April, up from about 100,000 in mid March, according to data by Centaline Property.
This hefty surge in the number of available homes has turned the secondary market into a buyer’s market, according to Tan Taipeng, a manager with property agency 5I5J.