Beijing and Shanghai were among the large Chinese cities
to see month-on-month declines in property prices in June. Prices in
Beijing dipped 0.4 percent – the biggest drop in two years, and in
Shanghai prices fell 0.2 percent.
Zhou Zhifeng, a
research director from JLL China, said,"The housing market actually
cooled down in terms of sales volume quite dramatically from last year.
The reason is very obvious, because of the tightening policies. Total
sales volume in the primary market basically dropped by 15 percent.”
First-tier
cities also increased the amount of land available to sell to
developers in the first half of this year, as land supply volume saw a
15 percent year-on-year increase. The housing development plan during
China's 13th Five-Year Plan period launched by the Shanghai government
earlier this month, says the city will create 1.7 million new housing
units by 2020, an increase of 60 percent. At the same time, the city
will also oversee the supply of 700,000 new apartments for lease by
“A lot of people are shifting their priorities
from maybe purchasing a property to leasing a property. I think the
government is trying to respond to that by increasing the residential
leasing stock in the market. The government obviously doesn't want to
lose the white collar workers generating economic growth in Shanghai. So
I think they are trying to accommodate the change to meet the needs of
the population,” said James MacDonald, head of research from Savills
China.