Gabriel Chan, a Hong Kong-based analyst, said the strongest weekly home sales in 19 months and revived optimism among property developers signal that Shanghai’s real estate market may be on the mend after the bubble burst in 2008, industry analysts said.
In the week ended May 10, 512,600 square meters of new homes, excluding those built for people displaced by urban redevelopment projects, were sold in the city, the highest weekly volume since October 2007, according to E-House (China) Holdings Ltd.
Xue Jian, an analyst with E-House, one of the country’s largest integrated real estate service providers., ‘I believed that the worst might have passed and the market is picking up strength again. Of course, it might fluctuate a bit in the coming months due to seasonal factors, but robust sentiment among home buyers could mean that we have seen the bottom.’
The boom in sales followed two recent real estate fairs held in the city. Organizers said the feedback they received from those who attended was very positive.
Visitors to the larger fair, which featured 200 exhibitors at the Shanghai Exhibition Center, more than doubled to 170,000 people from a year earlier, and transactions valued at about RMB1.92 billion (US$281 million) were signed during the four-day event. That was more than three times the deals concluded at the same event a year earlier.
A smaller fair, held in the eastern area of Pudong, drew 60 exhibitors and 48,000 visitors.
Industry analysts said the market started perking up as early as February, just after the week-long Spring Festival, a traditionally slack season for home sales.
According to Shanghai Uwin Real Estate Information Services, sales of new homes in April totaled 1.89 million square meters, up from 1.5 million square meters in March, 787,600 square meters in February and 480,000 square meters in January.
Aside from a spurt in new home sales, the existing home market is also showing signs of renewed life.
According to Century 21 China Real Estate, about 28,600 existing homes changed hands in the city in April, the highest monthly figure since 2006. That compares with about 25,700 units in March and 15,000 units in February.
Rising home sales have been accompanied by a more upbeat attitude among property developers, many of whom view the current environment as a ripe time to buy land.
Shanghai Daily reported Shanghai’s property market suffered major setbacks in 2008 when the bubble burst, with many available development sites going begging. Many of the country’s developers, pinched by sluggish sales and a lack of cash, chose not to participate in land auctions.
During the first quarter, the Shanghai Urban Planning, Land and Resources Administration Bureau announced 97 land parcels will go to auction, 35% of them designated for residential development. That’s a higher proportion dedicated to homes than in the same period a year earlier.