Beijing’s housing market gets a little frothy after market-calming measures help cool transactions in Shenzhen and Shanghai

Tightened housing market policies in Shanghai and Shenzhen have had the unintended consequence of spurring Beijing’s housing market, as secondary market transactions surged to a three-year high in March.

Sales of previously lived-in homes for the month rose to 32,000, a 111 per cent gain from February and a 175 per cent jump from a year ago, according to data from property agency BA Consulting & 5I5J Group.

“The market sentiment is shifting to Beijing,” said a manager at a Beijing-based developer who does not want to be named.

The manager said the firm had held back some new projects in Beijing in the first quarter, in order to raise the selling price and bring them to market in the second quarter or later, as it is increasingly bullish on the market.

The market continues heating up in Beijing, as new homes sold during the Ching Ming festival — a three-day public holiday from April 2 — was the highest for six years, according to Yahao, a real estate consulting agency.

“Beijing is a city of 22 million population, that is even more than Shanghai or Shenzhen. Pent up demand will be released and the market is so big,” said the developer.

Unlike Shanghai and Shenzhen, Beijing’s home prices have experienced milder growth in the past year, rising 10 per cent year on year in March. That compares to 57 per cent jump in Shenzhen and 20 per cent in Shanghai. The average new home price is 35,456 yuan per square metre, below Shenzhen and Shanghai, according to data from the China Index Academy.