Developers rush to cash in on Shenzhen’s new status

It is known as the “818” policy, after the day on which Shenzhen was given its status as a Pioneering Zone for Socialism with Chinese Characteristics. Since August 18, the city’s property developers have been celebrating by releasing a flood of new homes onto the market, raising expectations of a surge in housing-based prosperity.

So far, it hasn’t happened. New data from Shenzhen shows that the supply of new homes in September expanded by nearly 150% month-on-month, as developers brought 533,500 sqm of space onto the market. Yet transactions dropped, totaling 2,748, down 9.55% over August.

Homes in the secondary market fared better, at 6,817 transactions, up 2.1% over August, at an average price of RMB 53,804 per sqm, up 1.1%.

That is not stopping the optimists. According to local media, potential buyers are waiting for another change, as the city will soon start having mortgage rates set by the new banking benchmark, known as the Lending Prime Rate. No one is willing to predict that mortgages will become cheaper – that would be like waving a red flag at the regulatory bull – but clearly, the hope is there.

Moreover, momentum seemed to start picking up toward the end of the month, according to local media. In the week of September 16-22, 759 new residential units were sold, a 50.6% jump on the previous week.

All eyes are on the Baoan district, which is where the airport and the new Shenzhen World Convention and Exhibition Center are located. Baoan sold 1,707 apartments in September, besting Longgang for two consecutive months, the first time it has done so since January 2015.

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