Shanghai Housing Market Shakes as Sellers Trade Price for Volume in Passive Sales

Housing prices in a certain neighborhood in Yangpu, Shanghai, have dropped 36% in three years.

[People News] China’s housing market affects the livelihood of countless families. Although Shanghai’s second-hand housing market recorded its highest transaction volume in nearly seven months in November, professionals believe that behind the surface of the data lies a much deeper market shock.

According to monitoring by Anjuke Shanghai, November’s total transaction volume hit a seven-month high, becoming the third-highest month of the year. But this is not a satisfactory number, because the China Index Academy’s Hundred-City Price Index report shows that in November, second-hand residential prices in the 100 monitored cities continued to fall month-on-month. Among them, second-hand residential prices in first-tier cities fell 1.15% month-on-month and 5.62% year-on-year. According to the same agency, second-hand housing prices in Shanghai fell 1.24% month-on-month in November.

According to a report by The Dajiyuan, on December 1, two analysts who have long observed Shanghai’s housing market—“Wutang” and “Master Mei”—released their latest views almost simultaneously. They both issued the same warning: Shanghai’s housing market is not undergoing a short-term adjustment, but is facing an asset revaluation triggered by the collapse of expectations.

The blogger “Wutang,” a “data-focused Certified Public Accountant (CICPA),” said the essential issue in Shanghai’s housing market is not price adjustment, but the loosening of the entire expectation system. Once expectations slip, it triggers a systemic structural sinking. He described what is happening as a “confidence fault line, not price fluctuation.”

After analyzing the “maximum decline” across all neighborhoods in Hongkou District, “Wutang” found that the declines were concentrated in extreme ranges: neighborhoods with price drops of 40% to 50% accounted for 36.02%; those with drops of 50% to 60% accounted for 14.37%.

“When prices in enough active neighborhoods in core districts fall by 50% or even more, the long-held psychological anchor of ‘reasonable price’ completely breaks. This causes prices to automatically continue falling until a new equilibrium bottom is found.”

Meanwhile, “Master Mei” (a long-time business training professional in China and a verified influencer on Weibo with more than 250,000 followers across platforms) used actual transaction data from multiple neighborhoods to validate the widespread 40%–60% deep-decline range proposed by “Wutang”:

• In Minhang District, the large community Shanghai Kangcheng peaked at 4.7 million yuan in July 2022. The latest transaction price is 2.48 million yuan—a 47% drop.

• In Putuo District, the “old and small” Weifang First Village peaked at 3.47 million yuan (unit price over 100,000), while the latest transaction price is 1.43 million yuan (unit price 39,000), a drop exceeding 60%.

• In Jing’an District, the “old and small” Xìngfú Xīnyuàn peaked at 4.49 million yuan in August 2022; the latest transaction price is 2.24 million yuan, nearly a 50% drop.

Master Mei summarized market sentiment with four words: “extremely watchful.” He said, “The rise in transaction volume is not a sign of warming, but the result of homeowners cutting prices to levels buyers are willing to accept.” This is a typical case of “trading price for volume,” not a healthy situation where both volume and price rise together. △