(Yicai Global) Sept. 6 -- Second-hand house trading in Shenzhen has been sliding since the first-tier Chinese city, with a population of more than 20 million, launched official guide prices for second-hand housing in February.

A total of 2,043 second-hand residential units were traded in August, plunging 81.96 percent year on year and hitting a new low for the same period in nearly a decade, China Securities Journal reported on Sept. 4.

Shenzhen’s second-hand residential property transactions fell for the fifth straight month in August, down 20.1 percent month on month. The trading volume is generally 6,000 to 7,000 units in August, according to track record, the report said, citing data from the Shenzhen Housing and Construction Bureau.

Since 2013, only the trading volumes in February 2020 and February 2019 — 1,667 and 1,997 respectively — were lower than that in August this year, both affected by the Lunar New Year holidays and the Covid-19 pandemic.

With less trading, transaction prices also weakened. The transaction prices of sample houses in August dropped by more than 10 percent from February, according to statistics from Qfang.com’s data research center, the report noted.

Analysts said the wait-and-see sentiment will become stronger in the market. It is too early to say that it is the bottom, partly due to the delay of the effect on the transaction data.

The real estate market was hot in Shenzhen last year. Residential sales in the southern city exceeded 140,000 units last year, a new record for transaction volume, according to statistics from the Leyoujia Research Center.

Some 45,384 new houses and 95,273 second-hand houses were sold in 2020, both up around 20 percent year on year. The average transaction price of second-hand houses topped CNY66,000 (USD10,223.4) per square meter, a rise of 10 percent from a year before. The prices of new houses were lower than second-hand ones due to price restriction policies.

In order to control the overheating second-hand home market, the Shenzhen Housing and Construction Bureau issued a notice in February, introducing the official guide prices for second-hand houses.

The guide prices are based on the online signing price of second-hand housing, with reference to the price of surrounding new housing. It also guided commercial banks to issue second-hand housing loans reasonably and stabilized market expectations.

Editor: Peter Thomas