The Shanghai real estate market is showing signs of a return to irrationality. On Sunday, a developer sold out every single one of the 352 homes built at a new residential development in Jing'an district. Anecdotal evidence also suggests that some homeowners have repeatedly raised their asking prices in recent months. Experts and industry insiders have pointed out that several factors have contributed to Shanghai's real estate market resurgence, including government policy, slumping stock prices and the city's inherent investment value. Rising home prices, however, though good for homeowners and realtors, are causing some people to worry about how they will be able to buy a house.
Zhang Yanbing, a real estate agent for Beijing Lianjia Real Estate Agent Co, one of China's leading realtors, has been swamped since the Spring Festival, usually a slow season for the real estate market.
From his company's branch office on Madang Road in Shanghai, Zhang pointed to figures on his computer showing eight homes had been sold in 2016 at Casa Lakeville, a residential development on Huangpi Road South in Huangpu district. In 2012, only five homes were sold over the entire year.
"In past years, there was hardly any business until about April," Zhang told the Global Times on Tuesday.
"This year it seems to be different. I have had about three new clients in this week alone," Zhang noted.
The markets for both new and secondhand homes in Shanghai have been heating up. In the secondhand market, 46,700 homes changed hands in January, up 137.81 percent from January 2015 and up 4.83 percent from December 2015, according to a report from Lianjia Real Estate.
There are even signs that the city's housing market is in the midst of another bout of exuberant irrationality.
The China Business News reported on Monday that buyers bought up every single one of the 352 homes built at a new residential development in Jing'an district on Sunday, the first day they went on sale. The sales brought in 3.6 billion yuan ($552 million) for the developer in a single day.
And it's not just in Shanghai. In 2016, real estates sales have picked up in many cities in eastern China, such as Nanjing and Hangzhou, said Wang Ruizhe, a real estate analyst at Capital Securities.
Pushing up prices
As turnover has grown, housing prices in Shanghai have shot up as sellers ask for more.
In Nanchang Garden, a development in Huangpu district, the owner of a home that sold for 12 million yuan in 2015 has raised the asking price for the property twice so far this year - first to 13.6 million yuan and then again to 15 million yuan on Saturday, Zhang said.
"There have been a lot of cases like this in 2016," he noted.
Qiu Dechao, a Shanghai resident, said she felt "compelled" to rush to buy a secondhand home in the city due to how fast sellers have been jacking up prices.
"In December 2015, I had my eye on a house near Jing'an Park, but was waiting so I could see more houses," she told the Global Times on Tuesday.
"Last week, the real estate agent told me the owner had raised the price because of all the interest he was receiving about the property," she noted.
Around 2 pm in Tuesday, she was waiting at the real estate trading center in Jing'an district to seal the deal.
"I can't wait any more. I am worried that the homeowner might raise the price again," she said.
Zhang said that he has heard of recent cases in which homeowners have backed out of sales.
"They want to hold on to their homes because they think values will only continue to rise," he said.
