[photopress:property_shanghai_apartments.jpg,full,alignright]As reported, new rules ban developers from reserving apartments for speculation purposes. The result is that Shanghai’s apartment supply surged 144.2% in the second week of September.
Shanghai’s Oriental Morning Post reported that from September 7-13, 394,600 square meters of apartments at 33 residential projects were put onto the market while the supply is expected to continue to rise through the end of October.
Why? Because the city’s top housing supervisor warned on August 23 that real estate developers who were found to have reserved apartments for speculation purposes will face the possibility of losing their licenses.
Thus within the period of September 1 to 13, the municipal government approved 109 licenses for housing pre-sales, which totaled almost 1.46 million square meters.
To misquote: Nothing clears a person’s mind so wonderfully as the thought that they might be delicensed on the morrow. However, the increasing housing supply may not be enough to offer buyers easy purchases of apartments. It is still too early to tell or rejoice.
But many real estate developers veered their business to commercial and retail facilities after the government started to curb residential projects across the country in 2004. This led to rising prices for new apartments while those of commercial facilities began to drop.
Shanghai has offered more than 4.89 million square meters of space in the first half of this year, of which almost 3.40 million square meters is being developed for industrial purposes, while only 17.3%, or 847,000 square meters is designed for residential buildings. So, reserving apartments for speculation purposes may well come to an end, but this will not overly-change the situation which is that there is a shortage of aparments.
Source: Shanghai Daily