Nov 17, 2023

(Yicai) Nov. 17 -- Sales of newly built residential properties in Shanghai are slowing, less than two months after the megacity eased curbs on housing loans, and a number of developers are rolling out incentives, such as allowing home buyers to take a year to make the downpayment, to boost sales, according to Yicai research. In September, Shanghai relaxed mortgage policies which lead to a short-term burst in property sales. But since October, the sales of new homes has started to slide again. Sales of newly built housing in Shanghai slumped 7.5 percent in the week from Nov. 6 to Nov. 12 from the previous week to 80,400 square meters, according to statistics from brokerage Centaline Property’s Shanghai branch. Some of the city’s top 10 development projects only shifted less than 10 apartments that week. “In the current real estate market, there are very few first-time home buyers who have “rigid demand,” or a genuine need for housing, a broker at leading real estate agency Lianjia told Yicai. Most of those looking to buy plan to first sell their old homes, which are not in very good condition, and purchase a brand-new one. This will only increase the number of pre-owned houses on the market. Longer Payment Period With few customers with a real need to purchase property and to cater to those who have to first sell an old property before they can purchase a new one, some developers are now allowing home buyers to put off paying a deposit. A man who lives in Shanghai told Yicai that in April he tried to purchase a property but was told by the developer that he had to pay the deposit within three days, which he was unable to do. But now he has signed up to buy a home in another apartment complex and the salesperson has offered him a period of up to a year to make the downpayment, knowing that he must first sell his old home in order to pay the deposit. Third-Party Agencies Developers are also resorting to third-party agencies to help them sell their properties. “Before, when the market was hot, developers would use their own sales channels. But now, more and more are asking Lianjia to represent them,” an employee at the Beijing-based company said. Around 20 percent to 30 percent of my time is taken up taking clients to view new properties and half of my sales are of newly built homes, he said. “We have turned to real estate agencies to help us sell our properties due to the downturn in the housing market,” said a person in charge of marketing and branding at the East China branch of one of the country’s top 10 developers. “We only started to do this in the second half. This is because once we start using external sales channels, the bonuses of in-house salespersons will be greatly reduced,” he added. Editors: Tang Shihua, Kim Taylor Follow Yicai Global on RELATED