Multiple indicators are impressive: "Shanghai's Seven Policies" activate the real estate market

Pudong New District Real Estate Transaction Center, Shanghai City Photographer for this edition: Zhang Da, Chen Yu Kang, Li Yingquan, Wu Jiaming, Photo service/Source from TuChuang Creativity

Securities Times reporter Chen Yu Kang

With the “Seven Articles of Hu” policy released on February 25 and the boosting effect of the traditional peak season, the Shanghai housing market has entered a stage of “bottoming out and stabilizing,” and is also seeing a “small spring” in the March real-estate market. Just past March, Shanghai’s secondary home listing prices saw a halt in the decline followed by an uptick, and the phase-specific transaction volume for secondhand homes hit a new high in several years.

According to data from Centaline (KeRuI), in March the transaction volume of secondhand homes in Shanghai exceeded 30,000 units, a veritable “golden March.” As of March 29, the transaction volume of secondhand homes had set records for three consecutive weeks, with the weekly online contract signing volume reaching 7,732 units, the highest weekly figure in the past five years. Among them, on March 28 (Saturday) the online contract signing volume was 1,585 units, setting a record for the highest Saturday and highest single-day volume in the past five years; on March 29 (Sunday) the online contract signing volume was 1,442 units, setting a record for the highest Sunday transaction volume in the past five years.

In addition to a significant increase in transaction numbers, the Shanghai housing market’s prices also stabilized and rebounded, sending an important signal of rising both volume and price. Data provided by the China Index Academy shows that in March Shanghai’s average listing price for secondhand residential homes increased month over month, ending the previous 33-month continuous downward trend.

On the afternoon of April 1, a Securities Times reporter visited the Pudong New District Real Estate Transaction Center in Shanghai. Although it was a workday, the real-estate registration and transaction大厅 on the third floor was still bustling with activity, with homebuyers, real-estate agents, landlords, and others moving back and forth nonstop. A large screen showed that both the number of ticket dispensations and business acceptance counts for the day were over 900.

Real-estate agent Manager Liu, who was accompanying clients to handle procedures, told the Securities Times reporter: “Since mid-March, the transaction center has often been in this kind of busy, bustling state. After the new ‘Seven Articles of Hu’ policy landed, many clients who had previously been stuck due to qualification or mortgage issues have started moving.”

After that, the Securities Times reporter went to Beicai Town. Located between Shanghai Pudong’s inner ring and middle ring, the area includes all kinds of residential options—demand-driven, improvement-focused, and mid-to-high-end—making it one of Pudong New District’s relatively high-popularity sectors. “Compared with some popular areas along the inner ring, our foot traffic is overall still fairly steady. After taking a group of clients to view properties in the afternoon, they were looking at a two-bedroom unit around 4 million. The clients felt the price was still a bit high and wanted to observe a bit more.” A secondhand-home sales manager who has been stationed in Beicai for eight years told the Securities Times reporter that Beicai’s buyer base is mainly office workers in the surrounding area and improvement-focused households. After the new policy, inquiries increased, but the actual deal pace had not noticeably gotten faster. “Landlords’ asking prices are firm, and there isn’t as much room for negotiation as there was earlier in the year, but buyers also generally have a wait-and-see mindset. From the data, the citywide transaction volume has indeed gone up, but our sector feels like it’s still slowly transmitting the heat; we may be able to feel it more clearly by April,” he said.

In this round of Shanghai’s “small spring” real-estate market, demand-driven households are the backbone of homebuying. Data from multiple third-party institutions shows that in March the share of secondhand-home transactions with a total price below 3 million in Shanghai exceeded 60%. In the first half of the month, the share of secondhand-home transactions with a total price below 3 million exceeded 70%.

Zhang Xiang, an analyst at the China Index Academy Shanghai office, told the Securities Times reporter that the “Seven Articles of Hu” accurately released homebuying demand, combined with the February early launch of the trial program for secondhand home acquisitions in the three areas, which provided a clear exit channel and a price anchor for “old, small, and broken” assets—effectively stabilizing market expectations.

Looking ahead, Yan Yuejin, deputy director of the Shanghai E-house Real Estate Research Institute, said that the activation of demand-driven buyers will create the premise for improvement-focused demand to “sell the old and buy the new.” He expects that in the coming months, market heat will broaden and transmit, and transactions in improvement-focused mid-to-high-end demand and the luxury-home market will receive a boost. Overall, the secondhand home market is expected to show a positive trend of “transaction volume leading, prices following steadily, and later both volume rising and prices stabilizing.”

(Editor-in-charge: Liu Chang ）

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