Source: Securities Times.
Author: Wu Jiaming

In the Shenzhen real estate market, there have been frequent reports about second-hand homeowners rushing to raise prices, leading to a phenomenon of owners initiating a 'price increase wave.' Furthermore, there are images circulating online showing that certain WeChat groups have started encouraging homeowners to 'maintain prices and protect positions,' while also providing price listing suggestions for owners selling properties in their communities. So, what is the actual situation in the market?

The negotiating space for prices is becoming smaller.

During an interview at a 'internet-famous' luxury residential community in Nanshan District, Shenzhen, a real estate agency manager mentioned to the reporter that the current listing prices for second-hand properties in the community are all above ten million yuan. Since the optimization of Shenzhen's real estate policies a few days ago, many second-hand homeowners have raised their prices by amounts ranging from 2 million yuan to 5 million yuan. Some properties with fewer instances of 'price resistance' have been sold, but these sold properties were priced lower prior to this. While visiting Luohu and Futian districts in Shenzhen, several real estate agency managers stated that their clients have recently proactively contacted them to inquire whether the previously viewed second-hand properties have been 'price raised.'

"Every time there is a release of real estate policies, the mindset of some landlords changes, which is actually quite normal and all based on personal willingness," Manager Zhong, a senior real estate agent in the Bagualing area of Futian, expressed. "A widespread phenomenon of price resistance has not yet appeared, indeed, the bargaining space of some second-hand properties is indeed decreasing. The subsequent situation will still depend on the overall market changes, but the recent increase in transaction volume is evident." Some buyers also mentioned that the reluctance of owners to sell due to 'price resistance' recently made them feel 'helpless,' but they have not raised their offers and prefer to 'wait and see.'

Recently, a comparison by Lianjia Research Center before the introduction of new policies and after the National Day holiday revealed the average listing price changes in 131 different areas of Shenzhen. It was found that the number of areas with price increases on listings has significantly increased, with 57 areas showing listing price increases, accounting for over 40%. Previously, there were generally no more than 10 areas where listing prices increased each month. However, although the number of areas with price hikes has increased, the majority of areas have not seen substantial increases in listing prices, mostly ranging between 0.1% to 0.5%.

However, data from Le You Jia's stores shows that during the National Day period, the company's second-hand property transaction rate increased from 3.5% to 7.4%, with a significant acceleration in customer decision-making speed and a clear recovery in confidence. At the same time, the bargaining space for second-hand properties decreased from a peak of 12% to 8%.

To cherish this hard-won 'booming'.

On the other hand, the listing volume of second-hand properties in Shenzhen continues to grow. As of October 1, 2024, according to the Shenzhen real estate information platform publicly available statistics on the number of second-hand properties for sale, the city has a total of 64,401 sets of second-hand properties available for sale. Compared to the 63,715 sets for sale as of September 1, there is an increase of 686 sets, a month-on-month growth of 1.1%, indicating a continuous overall growth trend in the current market supply of second-hand properties.

Before the National Day holiday, Shenzhen once again optimized real estate adjustment measures, such as the relaxation of purchase restrictions, reduction of down payment ratios, and shortening of the years for exempting value-added tax, effectively reducing the threshold and cost of home purchasing. He Qianru, Director of the Meilian Property National Research Center, stated that in the few working days after the National Day, the transaction speed of residential properties in Shenzhen was only slightly slower than during the holiday period. However, compared to the average level in September, the transaction volume was still significantly higher. Therefore, it is believed that the transactions in October will be quite active. However, He Qianru also mentioned that at the current stage, the rising prices are overly optimistic in the market. At present, it is only the initial stage of the real estate market's development towards improvement, and the pace of steadily increasing transaction volumes has not stabilized. Therefore, it is recommended that all parties in the market cherish the hard-won 'booming trade' in order to truly bring the market back to normal development.

The Shenzhen Real Estate Intermediary Association believes that a rational view should be taken on the 'stabilizing after decline' tone. In the future, accompanied by changes in supply and demand relationships, there will inevitably be a deep differentiation in the real estate market landscape. On the one hand, core cities like Beijing, Shanghai, Guangzhou, and Shenzhen, under the favorable policies of this round of relaxation, will demonstrate strong synergetic effects. On the other hand, internal differentiation within core cities will also show intensified features. Although the future development of the real estate market will inevitably be stable and orderly, the vast majority of housing will further return to its intrinsic residential value. However, a small number of scarce 'good properties' that combine quality, location, resources, and other factors will not only be 'houses', their asset value will gradually be reflected.

"Subsequent market may face some fluctuations that need to be taken seriously." Li Yujia, Chief Researcher of the Housing Policy Research Center at the Guangdong Urban and Rural Planning Institute, said.

Editor/Jeffy