Secondhand housing market gets a chill amid tight regulations
Published: Sep 12, 2021 10:50 PM
Commercial apartment buildings of Hengda Real Estate Group Co are under construction in Huai'an, East China's Jiangsu Province. Photo: VCG

Commercial apartment buildings of Hengda Real Estate Group Co are under construction in Huai'an, East China's Jiangsu Province. Photo: VCG

Secondhand housing markets in several major cities from Beijing to Shanghai to Shenzhen in South China's Guangdong Province have been hit hard, as regulators moved to tighten regulations to both stabilize the market and prevent major financial risks. 

With transactions dropping significantly, an increasing number of real estate agents are quitting their jobs, according to several real estate agents focusing on sales of secondhand homes.

In Shenzhen, the number of deals for secondhand commercial properties dropped to a 10-year low of 2,520, a decrease of 77.28 percent year-on-year, latest official data showed.

Shenzhen rolled out measures to regulate the local secondhand housing market in February.  

In Shanghai, a total of 18,000 secondhand housing transactions were made in August in Shanghai, down 40 percent on a yearly basis, the biggest drop so far in 2021, financial news site reported on Monday.

The sharp drop came after the municipality implemented a new price-evaluation policy targeting local secondhand housing at the beginning of August, according to the report.

In Beijing, transaction volume of secondhand housing also dropped 10.7 percent in August from the previous month, after local regulations were further tightened, according to media reports. 

The downturn of the secondhand housing market came after Chinese regulators have been focusing on preventing major financial risks and improving market regulations across the board.

The Central Committee for Financial and Economic Affairs held a meeting last month and stressed efforts to coordinate work to forestall major financial risks. 

Analysts noted that real estate market risk and local hidden debt risk are the two major risks that need to be prevented.

The sales slump in the secondhand housing market has also hit real estate agencies hard, as many agents have not been able to complete a deal for a long time. 

A Beijing-based real estate agent told the Global Times that nearly half of his colleagues in his district have quit their jobs. "Some agents have been under pressure for not completing even a single deal, so they choose to leave the job," he said.

In the first half of 2021, new filings of real estate agencies in Shenzhen fell 34 percent year-on-year, with a loss of 11.8 percent of industry employees from the previous year, according to a report from the Shenzhen Real Estate Intermediary Association. 

On August 18, Hangzhou in East China's Zhejiang Province launched a function on the government's official secondhand marketing supervision platform, allowing home sellers to directly list their properties on the platform. Prospective buyers can access the listings without having to go through a real estate agency. 

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