"Overall situation better than last year" Shenzhen's real estate demand continues to be released during the Qingming holiday

Securities Times reporter Wu Jiaming

As “Silver April,” the traditional peak sales season for the housing market, has long been regarded within the industry as a “critical window” for observing market direction—especially in March just concluded—when the primary-tier cities’ housing markets delivered solid “report cards.” The market performance during the Qingming mini-holiday was particularly noteworthy.

During the Qingming holiday, when the reporter conducted on-site visits in the Shenzhen market, several new-home sales managers and second-hand housing agency managers all said that this year’s real estate market conditions during the Qingming holiday were slightly better than last year, and that accumulated demand in the market continued to be released. At the same time, second-hand residential communities around the border ports have become the focus of home-buying interest among Hong Kong buyers.

“During the holiday, Shenzhen saw persistent rainy weather, but the project still achieved good sales results. On the first day of the Qingming holiday, we sold three units; over the entire holiday we sold more than 10 units. The overall situation is better than last year. The company is also planning to gradually pull back the discounts.” Near Guangya Garden in Longgang District, a marketing manager said, “The Labor Day holiday is even more of a crucial ‘window period.’ We expect the overall market will continue to recover in the near term.”

Regarding the plan for new-home projects to withdraw discounts, several homebuyers interviewed believed that this move is mostly “marketing talk” for projects. One homebuyer said: “We care more about the quality of the home and value for money. There are quite a few choices of new homes in the market now, so we won’t make a rushed decision just because of this small discount.”

Industry insiders said that since last year, the “price-cutting to sell homes” behavior in Shenzhen’s new-home market has ceased to be a common market phenomenon; it has been limited to a small number of developers under pressure from strained capital chains. In addition, some developers’ strategies have shifted from “pursuing sales volume without prioritizing pricing” to “seeking sales volume while also seeking pricing.” Furthermore, under normal circumstances, for new-home prices to show a broadly rising trend, it would only become apparent after transaction volume has increased for consecutive six months. However, Shenzhen’s overall transaction volume for new homes is clearly lower than that of second-hand homes.

According to data from Le Jia’s research center, from April 1 to April 3, Shenzhen’s cumulative online contract signings for presold and delivered first-hand residential units totaled 361; second-hand residential units totaled 685. Combined, the two figures have already exceeded 1,000 units. It is worth noting that Shenzhen’s second-hand homes have ignited the momentum first, becoming the core engine behind this round of a “small spring rally.”

A senior real estate agent from the Shenzhen Middle School district housing area in Luohu District told the reporter: “In the first few days before the Qingming holiday, a few units in Jinhui Hao Yuan and Jiahucheng community were sold, and the heat of transactions has indeed increased. But prices haven’t changed much for now; basically they are in line with the end of last year.” The reporter also interviewed several real estate agency managers in different areas, and they all believed that the current second-hand housing market still relies on price support. “Trading volume for price” is a prerequisite for market activity to warm up. “Now homebuyers are very rational—when the price is right, they act. Owners also understand this, and many people are willing to lower prices appropriately to facilitate transactions.”

Meanwhile, the warmth in second-hand homes around the border port area is even more pronounced. Fu, a real estate intermediary working at Yumin Village near the Luohu Port, told the reporter that recently, the rate of sales and de-stocking for second-hand listings in that community has accelerated, even “topping” many institutions’ March rankings of second-hand home transaction volumes. Data from the Shenzhen Real Estate Intermediary Association also confirms this: the transaction volume of Yumin Village ranked first among all Shenzhen areas in terms of the volume of second-hand residential homes recorded in March.

“More than half of the clients I am handling come from Hong Kong.” Fu analyzed that the community is adjacent to the Luohu Port, has a high proportion of small- and mid-sized units, and—after several years of price pullbacks—its appeal to Hong Kong clients is very strong at present.

(Editor: Wen Jing)

Keywords:

                                                            Housing market