Shanghai Housing Sales Plunge 86% in Golden Week

-edited

Golden Week, a seven-day Chinese holiday, is traditionally a peak period for home sales. This year, sales plummeted.

The South China Post reports ‘Golden Week’ Property Sales Plunge in Major Chinese Cities.

Property sales in China’s major cities saw one of their worst “golden week” holidays in years, as buyers held back amid a slowing economy and tight restrictions on mortgage loans.

Sales of new homes in Beijing dropped to their lowest level since 2014 during the week following the National Day holiday, according to data from the property information portal Zhuge.com.

By area, sales of new homes in Shanghai plummeted 86 per cent to 5,000 square metres, while the capital saw a 92 per cent plunge to 2,000 sq metre, according to data from Centaline Property.

Clement Luk, a director for east China at Centaline Property, said the home-buying mood has been dampened by the tightening of mortgage lending and the prolonged US-China trade war that discouraged spending.

“People do not want to commit in big investment now, like purchasing any homes, as market sentiment has cooled quickly since March,” he said. “Most owners prefer travelling during golden week holiday instead.”

“Deals are increasingly difficult to conclude unless owners are willing to cut selling prices at big discounts,” said Guo Yi, chief analyst at Beijing-based property consultancy Heshuo Institute.

Beijing Dilemma

When property speculation ends, property bloodbaths begin.

Mike "Mish" Shedlock

Comments (17)
No. 1-8
George Phillies
George Phillies

"By area, sales of new homes in Shanghai plummeted 86 per cent to 5,000 square metres, while the capital saw a 92 per cent plunge to 2,000 sq metre, according to data from Centaline Property."

A square meter is about 11 square feet. 5000 square meters is around 50 small homes. Something got lost in translation on those area numbers, or the data is strange.

LB412
LB412

I listened to a China based analyst this weekend (long drive). He was commenting on the trade talks. Essentially said he didn't think the Chinese would give much ground until the real estate market collapsed.

Tony Bennett
Tony Bennett

"market sentiment has cooled quickly since March,”

...

I'm not buying the Trump needs the trade deal more narrative.

Tony Bennett
Tony Bennett

"When property speculation ends, property bloodbaths begin."

...

Yes.

There might be a sticky price stalemate for a period .... then down they will go.

"experts" in US were wrong in 2006 / 2007 that market will plateau for a while then onward and upward.

SMF
SMF

China overbuilt, China way overbuilt. All the other reasons are meaningless unless they explain how supply overshot demand.

JG1170
JG1170

I don't know about China but I drive around all of Los Angeles nightly and see all the high-rises that were finished a year or two ago still sitting almost empty and begging for tenants...while everyone is stuffed to the rafters inside of 1940's studios and bachelor apartments. It feels a whole lot like 2007, just perhaps a little less frenetic than last time, but still really, really insane.

Six000mileyear
Six000mileyear

If the trade war were a bonafide reason for plunging real estate sales in China, then real estate would have plunged in the US as well since the US is the other half of the trade war.

Stuki
Stuki

Good for the Chinese, who may get a bit more house per hour of labor than before.