(Yicai Global) Sept. 8 -- Sales of second-hand homes in China’s first-tier cities such as Shanghai and Shenzhen plunged last month amid ongoing policy adjustments to rein in the country’s housing market.

Some 18,000 pre-owned homes sold in Shanghai last month, down 40 percent from a year earlier, the biggest drop so far this year, according to data released by Shanghai Lianjia Research Institute yesterday.

The total value of the deals fell 44 percent to CNY57.4 billion (USD8.9 billion). The average price was CNY3.18 million (USD492,000), a 7 percent drop, and CNY38,206 (USD5,910.5) per square meter, down 5 percent. 

In Shenzhen, sales fell for the fifth straight month, plunging 82 percent to a 10-year low of 2,043 units, according to data from Shenzhen Housing and Construction Bureau and Qfang.com. The number of deals also fell in Beijing, dropping 10.7 percent from July to 15,942 units.

Guangzhou, another first-tier city, recorded 7,000 new home sales, the lowest in the past 15 months.

The decline in Shanghai was mainly due to the local government’s continuous and intensive regulation of the city’s real estate market, said Yang Yulei, chief analyst at Shanghai Lianjia Research Institute.

The average sale price fell because banks approved house loans based on the lowest value among the trading center’s valuation price, the bank’s valuation price, and the contract price, which affected affordability for some home buyers, Yang added.

Most hotspot cities have responded to the central government’s call to tighten oversight of the property market. The pre-owned housing market in these cities is expected to continue cooling down in the second half of this year, said Pan Hongyu, a researcher at E-House China R&D Institute.

Editor: Tom Litting