Beijing's secondary home prices rise for first time in 10 months
Housing sales in Shanghai suffer amid a crash in the stock market
Prices of existing homes in Beijing rose 2.6 per cent in June from a year earlier, ending a nine-month losing streak, while a recent stock market rout took a toll on sales in Shanghai, the latest SCMP-Century 21 index showed.
It means China's capital beat Shanghai for the first time since January last year in terms of year-on-year price changes. The financial hub managed to keep an upward trajectory in the asking price of existing homes last month, but investors lost their gains or slipped into the red in a stock market crash, which affected their homebuying plans.
"Whether Shanghai as a first-tier city still has the power to continue leading a recovery in the housing market remains to be seen," said consultancy Century 21 China Real Estate, the partner of the South China Morning Post for the monthly index.
Transactions of existing homes fell 6.6 per cent to 36,254 units in Shanghai last month from the city's second record high in May. But they remained above 30,000 units for a third month, which is unprecedented in its history.
One reason for the drop was that the number of secondhand homes with an attractive price-to-value ratio dwindled after sales hit 38,816 units in May and 38,248 units in April.
"There was no supply in some areas, which negatively affected last month's transaction volume," Century 21 said.
A stock market rally before its sudden crash in mid-June had boosted expectations that fortunes made there would be remitted to buy homes, which would help sustain a nascent policy-induced housing recovery.
Despite that, Century 21 said sentiment would be affected but not smashed by the still volatile stock market.
"Monetary conditions will remain loose in the second half, reducing the likelihood of a traditionally slack season in July and August," it said.
Prices of existing homes rose 0.6 per cent in Beijing last month from May to 42,327 yuan per square metre, gaining for 10th consecutive months. They also grew for a ninth month in Shanghai, up 1.1 per cent to 35,573 yuan per square metre. That kept the index unchanged at 161 in Beijing, but pushed it up in Shanghai to 147 from May's 145.
Transaction volume in Beijing's secondary market jumped 12.1 per cent from May to 20,304 units, the highest since March 2013. Century 21 said that would boost the city's primary market while a frenzy in the land market would also sustain the housing recovery in the capital.
"In some hotly chased locations, developers have constantly pushed up land prices to record highs at government auctions, which will possibly drive up prices of existing homes in the neighbourhood," it said.