Lived-in home deals in Shanghai hit 20-month high in March, but agent says bull run may be ‘short-lived’ amid economic concerns

by Daniel Ren at

Transactions involving lived-in homes in Shanghai shot up in March as owners offered discounts to bargain hunters, but the outlook for the city’s housing market remains cloudy due to concerns about a bleak mainland Chinese economy.

The number of transactions hit a 20-month high, and a total of 24,000 pre-owned flats changed hands last month in the mainland’s most developed metropolis. This tally was also 24 per cent higher than February and 86 per cent above the same period a year ago, according to property agency Lianjia.

The average price for lived-in homes rose 2 per cent month on month to 40,560 yuan (US$5,607) per square metre, and nearly 90 per cent of the transacted homes sported a price tag of less than 6 million yuan. Most are located in areas away from the city centre.

“The jump in the number of transactions resulted from the release of pent-up demand, as some owners reduced prices to satisfy interested buyers,” said Xie Jiaojiao, a senior sales manager with property agency 5I5J.

“But market sentiment became weak at the end of March, as would-be buyers expected further price cuts before making their purchase decisions.”

The prices of lived-in homes in Shanghai have slumped by more than 20 per cent from a peak in mid-2022 as a result of a property crisis that has seen dozens of developers face a capital crunch.
The crisis has also deterred thousands of residents from buying flats despite a strong desire for improving their housing conditions, said You Liangzhou, the owner of Baonuo, a property agency in the city.

“In the absence of substantial policy support in Shanghai, most potential buyers will remain cautious about buying flats, because of a bearish view of the national and local economies,” You said.

“All signs are showing that a bull run in March will turn out to be short-lived, now that most buyers are taking a wait-and-see approach.”