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Interface News reporter | Wang Yuhan

July is usually the off-season for the property market, but Shenzhen homebuyers' enthusiasm remains unabated.

According to the Shenzhen Real Estate Agency Association, continuing the good market conditions in June, the city's second-hand housing transaction volume exceeded 5,000 units in July, a month-on-month increase of 1.4% and a year-on-year increase of 79.4%, setting a new high since February 2021.

From the monthly trend, the sales volume of second-hand houses in Shenzhen continued to grow in early July, but after the middle of the month, the new sales volume weakened and fell slightly in the second half of the month. Overall, the sales volume of second-hand houses in the Shenzhen market basically remained at around 63,000 units.

According to monitoring by the Leyoujia Research Center, 4,573 second-hand residential properties were transferred in Shenzhen in July, up 10% month-on-month and 102% year-on-year. Since March this year, the city's transfer volume has remained at around 4,000 units for five consecutive months.

Transfer data usually has a lag of 1-2 months, so the July data also indirectly verifies the activity level of the Shenzhen market in the second quarter.

"In July, the off-season of the real estate market, Shenzhen's second-hand housing prices were able to rise against the trend. This was mainly due to the combined effects of lowering housing prices, costs and thresholds under the various relief policies. These policies have created a huge stimulating effect for Shenzhen, where rigid demand is concentrated," Li Yujia, chief researcher at the Housing Policy Research Center of the Guangdong Provincial Urban Planning Institute, told Interface News.

First of all, in terms of housing prices, the average transaction price of second-hand houses in Shenzhen in July has officially fallen below "60,000 yuan" and entered the "5-digit" era.

According to the statistics of Leyoujia Research Center, the average transaction price of second-hand houses in Shenzhen in July was 59,000 yuan/square meter, down 2.5% from the previous month and 15.2% from the previous year. The latest owner's listing price also fell to 67,400 yuan/square meter, down 0.7% from the previous month and 12.5% ​​from the previous year.

In total, the price of second-hand houses in Shenzhen dropped by 10,000 yuan per square meter in one year.

The decline in housing prices has also activated the purchase intentions of some rigid demand buyers in Shenzhen. Among the second-hand houses sold by Shenzhen Leyoujia in July, 60.7% were priced below 5 million yuan, of which the proportion of 3-5 million yuan increased by 1.3% from June.

In July last year, only 40.7% of second-hand houses sold were priced below 5 million yuan. In one year, the proportion of houses priced below 5 million yuan has increased by 20 percentage points.

From a regional perspective, Longgang District has the highest proportion of second-hand residential transfer transactions among all districts in Shenzhen. In July, 1,005 units were sold, making it the only district with more than 1,000 units, up 5% month-on-month; Futian District ranked second with 898 units sold, up 14% month-on-month; Nanshan District ranked third with 745 units sold, up 10% month-on-month.

Li Yujia said that the increase in buyers with urgent needs is related to the decline in housing prices, with more houses falling below 5 million yuan in total price, and the shift in transaction willingness toward lower total prices.

According to Leyoujia's survey report on Shenzhen citizens' willingness to buy houses in the second half of this year, 45% of Shenzhen citizens have a total budget of less than 3 million yuan, 29% have a total budget of 3-5 million yuan, and 74% have a total budget of less than 5 million yuan.

Overall, the data for second-hand houses in Shenzhen in July showed a good result, mainly due to the decline in housing prices. In addition, a series of policies introduced by Shenzhen in the second quarter lowered the threshold for buying houses, which together contributed to the release of demand in July.

Unlike the hot second-hand housing market, new home transactions in Shenzhen remained at a low level in July.

According to the Shenzhen Real Estate Agency Association, a total of 3,019 new homes were sold in Shenzhen in July, down 5.5% from the previous month and 16.8% from the previous year. Among them, 2,616 new residential homes were sold, down 10.6% from the previous month and 17.1% from the previous year. Compared with the second-hand housing market, there is an uneven phenomenon of new and second-hand housing.

Since the beginning of this year, despite the stimulation of multiple rounds of policies, the transaction volume in Shenzhen's new home market has not improved significantly. The average monthly pre-sale transactions in the first seven months were 2,107 units, a decrease of 18% compared with the average monthly transactions in the second half of last year.

"When rigid demand becomes the dominant factor, coupled with a large supply of second-hand houses, large-sized new houses will be replaced, resulting in new houses hovering at a low level in recent years," said Li Yujia.

The supply side also saw a decline. According to Leyoujia statistics, the newly added pre-sale area of ​​first-hand residential properties in Shenzhen in July was 207,000 square meters, and the newly added pre-sales were 1,737 units, both of which decreased by more than 50% month-on-month.

The substantial reduction in supply also contributed to the decline in inventory area. As of the end of July, Shenzhen's new home inventory was 4.95 million square meters. Calculated based on the average monthly pre-sale transaction area in the past six months, the sales cycle was reduced to 22 months.

In addition, it is also worth noting that since mid-to-late July, the transaction volume in the Shenzhen real estate market has shown signs of fatigue, with transaction volume declining for three consecutive weeks. This also indicates that the Shenzhen real estate market will face greater downward pressure in the future, and the direction of the market is still full of uncertainty.