(Yicai Global) July 6 -- Shanghai’s second-hand home market is booming, with a fast turnover of properties and high prices. However, in most other parts of the country, there are not enough buyers for the glut of pre-owned homes coming on the market as China relaxes real estate curbs.

The number of second-hand apartments up for sale in China’s main cities increased 6.8 percent in June from May, according to market research firm 58 Anjuke Institute. Nanchang in eastern Jiangxi province had the biggest gain at 31 percent, followed by Harbin in northeastern Heilongjiang province at 23 percent and Changchun in northeastern Jilin province at 20 percent.

Shanghai, which used to have a shortage of lived-in apartments for sale, enjoyed hot sales in June with prices on the strong side.

There is not much space to haggle in Shanghai's pre-owned apartment market, Lu Wenxi, chief analyst at Centaline Property Shanghai, told Yicai Global. "Prices can be negotiated, but they won't drop much," he added.

Properties located between the middle and outer ring roads of the city have been selling quickly recently, a Lianjia salesman in the city’s Baoshan district told Yicai Global. Even though more second-hand homes are coming on the market, there is a constant flow of people coming to view and the transaction ratio is good.

There are about 40 percent more lived-in apartments on the market in the area that I am in compared with pre-pandemic times, he said. But homeowners don’t need to worry about not being able to sell as there are plenty of buyers and the final transaction price can even go up a bit.

"I am planning to sell my apartment in downtown Shanghai,” said Wang Mei, a white-collar worker. The real estate agent told me that there is no need to reduce the asking price as the deal could be closed in as little as a week.

"Based on our observations, the number of luxury properties up for sale in the city is per usual and prices are generally stable or even rising in certain areas," Lu said, dismissing market rumors that this sector of the property market is struggling to find buyers.

Low inventory and high transaction rates have long characterized Shanghai’s second-hand housing market. Last year, 270,000 pre-owned homes changed hands, an average of 22,500 a month, and almost all apartments were sold after being listed by real estate agents for sale.

Oversupply

But it is a different story in other parts of the country. The number of pre-owned homes up for sale in Chongqing, southwestern China, has doubled in the past month to 17,400 units, according to Lianjia data. In Chengdu, southwestern Sichuan province the number jumped nearly 10 percent to 171,000 units and Hangzhou in eastern Zhejiang province saw 7,000 more such properties listed for sale in the last 10 days of May, bringing the total to 95,000.

In Nantong, a city close to Shanghai in neighboring Jiangsu province, there are 64,590 pre-owned apartments on the market, a gain of 2,000 units from early March, according to Beijing-based Lianjia. It may take more than five years for all the apartments to be sold based on the city’s usual sales rate, it said.

"Selling pre-owned apartments has become really hard recently," said Jiang Min, an apartment owner in Nantong. Jiang’s apartment been on the market for eight months, and the number of potential buyers asking to view it are getting fewer and fewer.

Over 230 apartments in her neighborhood are for sale and almost every unit's price is falling, she said. The asking price of some apartments has dropped by CNY200,000 (USD29,821) and some even by CNY500,000.

Editors: Tang Shihua, Kim Taylor