According to Caixin News on September 4th, the second-hand housing market in Hangzhou in August ended its continuous five-month high-performance trend.

According to the data released today by Ke Holdings Research Institute in Hangzhou, there were 6,688 second-hand residential properties sold in the ten districts of Hangzhou in August, including self-service transactions. This is a 19.8% decrease compared to July (8,341 transactions) and a 24.6% increase compared to August of last year (5,368 transactions). Compared to July, the overall transaction volume of intermediary residential properties in the city decreased by 21%.

"Due to the weakening effect of the real estate support policy and the impact of high temperatures, the transaction volume of the second-hand housing market in Hangzhou in August naturally declined. However, the transaction volume of 6,688 units is still the best August since 2021," said an analyst from Ke Holdings Research Institute in Hangzhou.

Industry insiders believe that the relatively good transaction volume of second-hand housing is largely achieved on the basis of price reductions.

"In terms of prices, the negotiation space has been increasing for five consecutive months, and the negotiation space in July and August both exceeded 9%, putting pressure on price reductions. The willingness of landlords to list their properties has not decreased, and the number of listed properties is still increasing, which is also related to the delivery volume of many projects in July and August," said the aforementioned analyst from Ke Holdings Research Institute. The average signing price for second-hand residential properties in Hangzhou in August was 27,628 yuan per square meter, a 5.5% decrease compared to July and a 7.4% decrease compared to August of last year.

Compared to the second-hand housing market, the cooling trend in the new housing market in Hangzhou is more pronounced.

According to the data released today by Zhongzhi Institute, the transaction volume of new commercial residential properties in Hangzhou in August was 0.4 million square meters, a 20% decrease compared to the previous month and a 47.3% decrease compared to the same period last year. The transaction amount of new properties for the month was 12.37 billion yuan, a 24% decrease compared to the previous month, and a 54.7% decrease compared to the same period last year.

"Hangzhou's transaction volume has fallen due to various factors such as seasonal factors, the rhythm of new housing supply, and market expectations. August is the off-season for the real estate market, and both the supply and demand sides of the new housing market have shown weakness. In addition, market expectations have weakened again, resulting in a general decline in the overall market heat. Furthermore, the overall activity in the new housing market has been average," said Gao Yinsheng, Executive Deputy General Manager of the China Index Research Institute in the East China region.

On the supply side, in August this year, the newly listed area of newly built commodity residences in the ten districts of Hangzhou was only 0.41 million square meters, a month-on-month decrease of 10.5% and a year-on-year decrease of 50.6%.

Looking at the cumulative data, according to the China Index Research Institute, from January to August 2024, Hangzhou's total transaction area for newly built commodity residences was 4.578 million square meters, a year-on-year decrease of 39%, further widening the decline.

Charts and data source: China Index Research Institute Hangzhou Branch

In terms of inventory turnover, according to data from Ke Research, the inventory turnover rate of new houses in Hangzhou in August this year increased by 3 percentage points from the level of 34% in July, but the inventory turnover rate in August was only 37%. This inventory turnover rate is 26 percentage points lower than the inventory turnover rate of 63% in August last year and 20 percentage points lower than the average monthly inventory turnover rate of 57% in the second quarter of this year.

"In hot cities like Hangzhou, where the previous transaction situation was relatively good, the market heat is stabilizing but the growth momentum is slightly insufficient," said an analyst from Ke Research.

Regarding the future market trend, Gao Yinsheng believes that with the increase in new housing supply in Hangzhou, the market activity has improved, but the differentiated market trend will continue for a period of time.

"The market is about to enter the traditional peak season of 'Golden September and Silver October', and the enthusiasm of real estate developers may rebound. In terms of upcoming projects, there is a significant increase in projects scheduled to launch in September, including the Olympic Sports Center, Future Technology City, and Canal New Town, which are popular sectors. This may lead to a significant increase in market heat in the new housing market. However, the phenomenon of differentiation will still continue. Core projects in the prime areas, low-density projects, or popular projects in the second and third-tier areas will maintain a high demand. Non-core and popular sector projects are expected to continue to experience slow sales," added Gao Yinsheng.

Regarding the second-hand housing market, analysts believe that the transaction volume of second-hand housing in Hangzhou is expected to slightly rebound in September. However, the market still maintains the principle of trading volume for prices, and even though the transaction volume has increased, it is still difficult to return to the high level of transactions seen in May and June.