(Yicai Global) June 6 -- Second-hand property transactions in Chengdu, a major city in southwestern China's Sichuan province, have been rising this year but the number of pre-owned houses for sale continues to climb.

Both the number and prices of sold pre-owned houses are growing quicker in Chengdu than in other big cities since the Lunar New Year holiday in late January, Yicai Global learned. In March, the number of pre-owned houses that exchanged hands was almost twice as big as new home sales in the capital city of Sichuan province.

From January to May, some 102,000 second-hand properties were sold in the urban hub of pandas and spicy food. In March, the number was 28,200 units, according to statistics from a third-party agency. In contrast, second-hand home transactions in Chengdu, including the suburbs, totaled only 151,300 units in 2022.

But the supply is also increasing as some 195,000 second-hand houses were listed for sale in the city as of mid-May, versus 180,000 in March, according to data from real estate agency Beike Zhaofang.

The trend was similar in other large cities including Beijing, Guangzhou, and Shenzhen, where the number of second-hand house listings remains high, Su Yu, research director at the Sichuan unit of China Index Academy, told Yicai Global.

Many factors are boosting transactions in the second-hand housing market in Chengdu, Su said. For example, the local government introduced a new policy last year to provide a more convenient way for homeowners to sell their small apartments and subsequently buy larger ones. Moreover, the backlog of post-Covid demand has been unleashed, and the low interest rates also drive up the demand, Su added.

Many homeowners with an area of less than 90 square meters are choosing to upgrade to larger ones so small and old homes are sold, a realtor told Yicai Global. However, the growing number of listings is also a source of worry for market observers as it will give potential buyers more options, resulting in no rush to buy, and that may force certain sellers to ask for a significantly lower price in order to cash out sooner, the agent added.

Market players' game mentality has already changed, Cao, a homeowner who is trying to sell her apartment, told Yicai Global. Some neighbors have already slashed their prices much lower than what she could accept.

On the other hand, buyers are gaining ground. Mu, who has been viewing properties lately, told Yicai Global that she has seen an apartment with an asking price of CNY5.2 million (USD730,345), but she felt confident enough to make an offer as little as CNY4.5 million.

Editors: Tang Shihua, Emmi Laine