May 15, 2019 (China Knowledge) - Home sales in Shenzhen hit a 30-month high in April as falling mortgage rates, population influx and an overall market upturn all helped to boost demand in the sector.
Despite this, analysts and agents believe that the surge was largely confined to between March and early April when buyers entered the market amid a more positive market outlook, with the surge in April largely due to the lag between the actual sale and official registration.
According to the Shenzhen Real Estate Information Platform, 7,570 old homes changed hands in April, increasing by 66% from the pervious month to a monthly record since October 2016.
Old home sales are generally seen as more indicative of market outlook as the sales and pricing of new homes are largely controlled by the Chinese government.
The uptick in Shenzhen comes after the Lunar New Year when buyers traditionally lower their reservations towards entering the housing market as well as a supportive environment such as reduced mortgage rates, the government’s welcoming stance towards incoming migrants and plans for the Greater Bay Area.
Despite this, some analysts and agents believe that old homes transactions have already peaked and real-time transaction data are already starting to show declines although transactions still remain higher than that during the second half of last year.
For Shenzhen, the recent trade war escalation could be detrimental to its local market due to its high concentration of export-oriented and technology-focused businesses.
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