According to the National Bureau of Statistics’ data made available on 19th September, out of the 70 studied cities, the average transaction price in primary residential markets has risen in 64 cities in August, while 4 of the cities have seen a fall and prices of 2 cities remained stable. Prices in Beijing and Shanghai has risen 25.8% and 37.8% y-o-y and 3.8% and 5.2% m-o-m respectively. Besides, Shenzhen has seen a 37.3% y-o-y and 2.1% m-o-m price rise, with the pace of price increase finally slowing down. Meanwhile, records showed that the number of transactions in Shenzhen’s primary residential market has fallen over 20% in August to a historic low, having already fallen for 2 months. Some suggest that the fall in transaction is a direct result of the 325 restrictive policy.

2,312 transactions were recorded in Shenzhen’s primary residential market in August, falling another 23% m-o-m from July’s 2,984 transactions. Among these transactions, the greatest fall was seen among mid- to large-sized units, falling over 33% from July’s 744 transactions to August’s 492.

An interesting point to note is that transactions have fallen despite the increase in supply in the period. In fact, with total number of projects launched doubling in the period, pre-sale consents were given to 4,450 units in August and total GFA adding up to 396,000 sqm, rising 86% and 51% m-o-m respectively from July’s figures. Although most projects focused on small- to mid-sized units, the rise in supply still failed to stimulate the transactions.

Despite the fall in transactions, average prices recorded in the period still saw a rise in August. Rising 2.1% from the RMB 56,625 per sqm recorded in July, average transaction price in the primary residential market grew to RMB 57,814 per sqm in August. The rise in price despite the fall in transaction may be a result of the market’s focus on luxury projects in the first half of the month, where transaction prices rose to around RMB 63,000. Yet, transaction price fell back to the RMB 40,000 to RMB 50,000 range as the focus switched back to mid-priced projects in the second half of the month, hence bringing down the total increase in average transaction price in the whole of August. More recently, in the week of 12th to 16th September, average prices have once again risen to around RMB 67,120 per sqm, surging a 23.6% w-o-w from the RMB 54,284 recorded the week before and rising almost 80% from the price recorded in September 2015.