Beijing, Shanghai second-hand home sales crawl up

October saw green shoots of recovery in the second-hand home markets of the mainland's two most important cities as prices in Beijing rose for the second consecutive month while they edged up in Shanghai for the first time since June, according to the SCMP-CTC index.

The average price for used homes in the mainland capital rose 1.1 per cent from September to 41,008 yuan (HK$51,890) per square metre, according to the index, which is a product of collaboration between the South China Morning Post and consultancy Century 21 China Real Estate (CTC).

In the country's financial hub, prices inched up to 34,071 yuan per square metre from 34,062 yuan.

As a result, the secondary home price index for Beijing edged up to 156 points from 155 in September, while that for Shanghai remained unchanged at 141.

Year on year, prices in Beijing fell for a second month, by 2.2 per cent, while they rose 3.1 per cent in Shanghai.

"Easier policies and stable prices will encourage more self-use buyers to enter the market as the industry outlook has become clearer now," CTC said.

Sentiment is warming after the central bank relaxed mortgage policies in September, followed by increasing discounts by a growing number of commercial lenders in recent weeks.

Meanwhile, many cities are also offering tax cuts and cheaper loans from local housing provident funds to support families buying homes for self-use. Most have scrapped home purchase restrictions.

CTC data showed second-hand home transactions in Beijing declined 1.3 per cent from September to 10,010 units, compared with the previous month's gain of 7.2 per cent. They were down 19.2 per cent from October last year.

Sales in Shanghai jumped 29.6 per cent from September to 17,031 units but were down 32.7 per cent from a year earlier.

After a slack beginning during the National Day holiday last month, sales had picked up quickly in the last two weeks because of easing policies, CTC said.

"Transactions of second-hand homes will keep trending up in November," it said.