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Shanghai’s housing market rebounds as banks quicken loan approvals amid lower mortgage rates, spurring demand
- As house prices shoot up, the city government can fast-track approvals for home construction and rake in higher proceeds from land auctions
- Local banks have quickened the pace of loan approvals to less than 10 days, in an apparent effort to bolster home transactions
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An easing of mortgage loan controls amid lower interest rates has given Shanghai’s property market a shot in the arm as the mainland’s commercial hub tries to make up ground lost during its Covid-19 lockdown.
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As house prices shoot up, driven by a surge in demand, the battered local economy should benefit because the city government can fast-track approvals for home construction and rake in higher proceeds from land auctions.
“Real estate has always been the most powerful weapon for local governments to propel economic growth,” said Ding Haifeng, a consultant at Shanghai-based financial advisory firm Integrity. “It is now time for this significant sector to play that role.”
According to market data provider RVMS, 19,725 pre-owned homes in Shanghai changed hands in July, up 27 per cent from the previous month.
The number stayed flat in August, at 19,500.
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Shanghai officially lifted a two-month, citywide lockdown on June 1, allowing businesses and life in the city of 25 million people to gradually return to normality.
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