Home-buying sentiments peak in city
Updated: 2016-02-13 00:40
By WANG YING in Shanghai(China Daily USA)
Insiders say Shanghai's residential market will continue to rise but also face some challenges in 2016. gao erqiang / china daily
Heated property trading in 2015 has elevated the home-buying intentions of consumers in Shanghai to a six-year high, according to a report jointly published by the Shanghai University of Finance and Economics and the national financial information center under the Xinhua News Agency.
The survey conducted in Shanghai showed that the index, denoting the number of people looking to buy an apartment, rose 6.8 points from the previous quarter to 65.9 points in the fourth quarter of 2015, up 14.1 points year-on-year. The report has been published quarterly since the third quarter of 2007, based on interviews with 1,000 people of different ages and income groups for each survey.
Xu Guoxiang, who heads the team in charge of the report, noted that although the index was the highest since 2009, it is still considered “pessimistic”. The report uses an index that ranges between 0 and 200 where readings below 100 points indicate unfavorable sentiments.
Among the consumers polled, 24.5 percent believe that now is the right time to buy a home, while 26.7 percent said that they would make a decision on home-buying within the next six months. Both show an increase from a quarter and a year earlier
The rise in positive sentiments has resulted mainly from the rigid demand for homes as well as the loosening of the real estate policy in the past year, said Xu, who is a professor from the Shanghai University of Finance and Economics.
Improvements to market liquidity were also found to have provided more support to the performance of housing sales in first-tier cities including Shanghai. A total of 14.79 million square meters of residential properties were traded throughout 2015, rising 52 percent year-on-year, and their total value soared 78 percent to 469.7 billion yuan ($71.4 billion) compared with the previous year, said Ding Zuyu, executive president of E-House (China) Holdings Ltd.
“Shanghai’s residential market has gone from strength to strength in 2015, and this trend is expected to continue in 2016. The market has received a significant boost from the lowering of interest rates and the refocusing of investment and development in first-tier cities during times of market uncertainty,” said James Macdonald, Savills research head, China.
But Chen Jie, a professor from the Shanghai University of Finance and Economics, suggested that home buyers exercise more prudence.
“The lesson to learn from the volatile stock market is that there are risks for every investment, even when the market is on the rise,” said Chen, referring to how the Shanghai Composite Index nosedived 45 percent between June 15 and August 26 in 2015.
Looking ahead, Frank Chen, executive director, head of CBRE research, China, expects the residential sector to face more challenges in 2016.
“Two factors, in particular, are likely to pose significant challenges: Inflated housing prices in major cities that weaken buyer affordability, and the effect of the US dollar rate hike to limit additional room for monetary and credit stimulus in China,” said Chen.
“Looking ahead, we urge the government to roll out policies to address the high inventory levels in low-tier cities and curb the rapidly increasing rate of housing prices in first-tier cities.”
- General strike against pension reform brings Greece to standstill
- Madrid airport sounds alarm after bomb threat on Saudi plane
- Obama proposes new oil tax to fund clean transportation
- UN special envoy announces temporary pause of intra-Syrian talks
- Taliban kill 10-year-old hailed as militia hero
- Obama slams anti-Muslim rhetoric during first visit to US mosque