Sales in Shanghai's pre-owned home market plunged in October as the government's measures to curb speculation were effective, which caused home seekers to adopt a wait-and-see sentiment.
The city saw about 22,566 units of pre-owned houses change hands in October, a month-on-month plunge of 32.6 percent, according to data compiled by Shanghai Centaline Property Consultants Co.
"The latest rein-in efforts introduced by the government in October immediately damped market momentum and in particular, changed prospects of many potential buyers," said Lu Wenxi, a senior manager of research at Centaline.
"As such measures remained in place, the monthly transactions of pre-owned homes returned to a normal range of about 20,000 units."
On October 8, Shanghai unveiled several measures including raising land supply and strengthening supervision of funding sources for land purchases — the second major move by the local government so far this year to curb speculative property purchases.
These pre-owned homes were sold for 36,276 yuan (US,250) per square meter on average, up 13.1 percent from September and also the highest monthly level seen so far this year.
The double-digit growth in the average price was due to a structural shift, Centaline research showed. Last month, 1,115 units of homes, whose prices start from 8 million yuan, were sold, a paltry drop from 1,185 units in September when 33,493 units of pre-owned homes were sold overall.
For the last two months of the year, transactions of pre-owned houses should hover around the current level, Lu predicted.
Shanghai's pre-owned home market started off great at the beginning of this year and hit its peak with sales of 56,634 units in March as buyers rushed to complete their purchases ahead of local measures to cool the market. On March 25, Shanghai issued tough measures that include a higher minimum down payment for second-home buyers and a higher eligibility threshold for non-local buyers.