Despite achieving a new high in transaction volume in nearly seven months in November, the second-hand housing market in Shanghai is experiencing deeper market turbulence beneath the surface, according to market analysts. It is not a result of demand revival, but rather passive transactions due to asset price reevaluations and collapsed confidence. The Shanghai real estate market is facing a systemic structural shift.
The report of the Hundred-City Price Index released by Zhongzhi Research Institute showed that in November, the prices of second-hand residential properties in 100 cities monitored by them continued to decline on a month-on-month basis. In particular, the prices in first-tier cities dropped by 1.15% month-on-month and 5.62% year-on-year. According to the institute’s monitoring, the price of second-hand residential properties in Shanghai dropped by 1.24% month-on-month in November.
Data from Anjuke’s Shanghai monitoring indicated that the transaction volume for the entire month of November reached a new high in nearly seven months, becoming the third highest month in terms of transaction volume this year.
Pengpai News pointed out that “price for volume” is still the mainstream logic in the current market.
Multiple sets of listing data also showed a significant decrease in the number of second-hand housing listings in Shanghai. Zhang Bo, director of the 58 Anjuke Research Institute, noted that the city-wide listing volume has begun to decline month-on-month, reducing ineffective supply, especially in core areas like Hongkou and Jing’an, with the withdrawal of listings increasing as more landlords are unwilling to sell at low prices.
On December 1st, two long-term analysts of the Shanghai real estate market – “Sugar-Free” and “Master Mei” – almost simultaneously released their latest perspectives. They unanimously warned that the Shanghai property market is not undergoing a short-term adjustment but rather facing asset reevaluation triggered by an impending collapse.
Blogger “Sugar-Free” is a certified public accountant (CICPA) focusing on data. He stated that the changes in this round of the Shanghai property market are not as simple as they appear on the surface. The fundamental issue in the Shanghai real estate market is not price adjustment but the loosening of the entire expectation system. Once expectations slip, it will trigger a systematic structural downturn.
“Master Mei,” who has been engaged in the business training industry in China for many years and is a verified influential figure on social media platforms with over 250,000 followers, used actual transaction data from various communities to verify the widespread occurrence of deep declines in the range of 40% to 60% as suggested by “Sugar-Free.”
For instance, the large community Shanghai Kangcheng in Minhang District reached a historical peak of 4.7 million in July 2022, but the latest transaction price was 2.48 million, a 47% drop.
In Putuo District, Weifang Yicun’s “old broken small” reached a historical peak of 3.47 million with a unit price exceeding 100,000, but the latest transaction price was 1.43 million (unit price 39,000), a drop of over 60%.
In Jing’an District, the community Xingfu Xinyuan’s “old broken small” reached a historical peak of 4.49 million in August 2022, yet the latest transaction price was 2.24 million, nearly a 50% drop.
“Master Mei” summed up the market sentiment with the phrase “extreme caution.” He said, “The increase in transaction volume is not a sign of recovery but rather landlords lowering prices to a level acceptable to buyers. This is a typical case of ‘price for volume,’ rather than a healthy simultaneous increase in volume and price.”
“Without Sugar” cited Morgan Stanley’s survey of 2000 residents, revealing a severe deterioration in market psychology:
– The bearish sentiment in first-tier cities soared to 67%.
– Among those planning to sell their property within six months, 52% are willing to sell at a loss.
– The proportion of prospective buyers willing to buy in the future dropped to a historic low of 48%.
– Only 15% of individuals are truly “highly likely to buy a house.”
This psychological shift indicates that sellers are now in “stop-loss mode” while buyers are in “freeze mode.”
Both bloggers’ analyses converge on a central conclusion: the Shanghai real estate market is entering a long cycle of significant asset reevaluation.
“Without Sugar” stated, “This is not just a fluctuation but a decade-long reset of assets. Prices from the old era are collectively being reset.”
“Master Mei” emphasized that the rapid decline in prices is due to the vulnerability of heavily leveraged assets in the face of uncertain income expectations. Buyers are hesitant to use leverage and are unwilling to be the ones caught holding the bag at the end. This structural asset reevaluation is pulling Shanghai back from the myth of being “resistant to decline” to a reality shaped by income compression and liquidity downturns.