Shanghai's home prices in August were stable, and developers are putting discount plans on hold.
Data from some local real estate agents show the average housing price in Shanghai for new homes was 22,651 yuan per square meter, 7.9% down from last month. Analysts say the drop is mainly due to the price discounts for suburban villas. Shanghai’s trading volume did fall during the month, with fewer customers showing interest.
Liu Qilin, senior analyst of Shanghai Deovolente Realty, said, "Clients are hoping for even lower prices, because of recent policy announcements, and the fact that banks have started to lower their lending rates for new apartment buyers. Clients are waiting to see housing prices fall."
China has imposed curbs on the property sector since 2010. Recent government policies to bolster a slowing economy, including interest rate cuts in June and July, helped boost pent-up demand for lower housing prices. However, analysts say most developers so far are delaying price cuts, which usually take place in September and October.
Liu said, "So far, we don’t see any signs of price wars even though it’s mid-September already. But as the year end approaches, developers will worry about their sales volume, and in that case, home prices may see some declines late in the year."
In the second-hand market, the average housing price was more than 17,000 yuan per square meter, up only one percent from the previous month. Developers expect that customers between now and the end of the year will primarily be searching for first-buy homes, and so that housing prices and trading volumes will continue to remain stable.