[photopress:real_estate_shanghai_exhibition.jpg,full,alignright]It depends on your definition of ‘weak’. Here it means that the buyers think that ‘wait-and-see’ is a good idea. It is possible that this might depress the local housing market for just a little longer according to industry insiders.
Xue Jianxiong, head of research at Shanghai Youwin Real Estate Information Services, told Shanghai Daily, ‘The market is still rather weak, and it might not be able to regain its strength as quickly as we had seen in previous years. Usually March is the month when transaction volume would begin to pick up quite significantly after the traditional slack January and February when Spring Festival usually falls.’
During the recent Shanghai Spring Real Estate Exhibition, held in the building seen in our illustration, a reliable barometer for the market, visitor numbers fell by around 5% to some 76,000 people. More ominously on-site transaction volume fell by more than 30% to about RMB200 million ($28 million).
A total of 369,200 square meters of new homes, excluding those designated for relocation, were sold in Shanghai in the first two weeks of March, which sounds like a lot but is 39.7% from a year earlier.
An over-stretched purchasing power, especially in the second half of last year, represented by record-high transaction volumes and prices, together with tougher macro-control policies introduced by the central government, could be the major reason behind the current weak market, according to industry insiders.
However, a low transaction volume doesn’t necessarily mean a cut in prices. There is no easy logic here. Several projects have been offered at higher prices recently.
Source: China View