Secondary home prices rise in Beijing and Shanghai, index shows

Secondary home transactions grew in Shanghai last month from April but fell in Beijing, while prices in both cities kept rising, according to the latest SCMP-Century 21 index.

Sales in China's financial hub increased 1.5 per cent to 38,816 units, the second consecutive month when transaction volume surpassed 30,000 units, which is unprecedented in history.

"Since a recovery in March, transactions ran high in April and May, which shows policy relaxation has lifted Shanghai's housing market significantly and the impact is sustainable," said property consultancy Century 21 China Real Estate, the partner of the South China Morning Post for the index.

"The easy policy environment will drive a slow bull in the housing market."

However, performance in Beijing was not as buoyant, with transactions falling 5.3 per cent from April to 18,120 units.

"Although the decline in Beijing's secondary home sales was not big in May, it still shows the housing market will step into a stable stage after consecutive surges in the past few months," said Century 21.

In year-on-year terms, sales jumped 118.7 per cent in the capital and soared 158 per cent in Shanghai.

Despite the divergence in sales, secondary home price in both cities grew from April, by 0.1 per cent to 42,096 yuan per square metre in Beijing and by 0.9 per cent to 35,182 yuan per square metre in Shanghai.

That marked the ninth consecutive month of increase in Beijing and the eighth month of gain in Shanghai.

As a result, the SCMP-Century 21 secondary home price index inched up to 161 last month from April's 160 in Beijing while it advanced to 145 from 144 in Shanghai.

In year-on-year terms, price increased 1.8 per cent in Shanghai at the fastest pace since October last year. But it dipped 0.1 per cent in Beijing, dropping for a ninth month.

The financial hub has so far escaped a year-on-year decline in secondary home prices since the nationwide property market downturn started in February last year.