Recently, in many first-tier and second-tier cities in mainland China, including Beijing, Hangzhou, Hefei, Wuhan, and Xi’an, the historical transaction prices of second-hand houses have been “hidden”. Industry insiders believe that hiding the transaction prices of second-hand houses is the authorities turning a deaf ear and creating information asymmetry deliberately.
On social media in mainland China, netizens have been discussing the issue of the “hidden” transaction prices of second-hand houses. Reports have emerged stating that several real estate agency apps in various cities, such as Beijing, Hangzhou, Wuhan, Nanjing, Xi’an, and Hefei, have stopped displaying the transaction prices of second-hand houses.
According to incomplete statistics, as of now, at least 15 cities nationwide have closed the information on the transaction prices of second-hand houses on several real estate agency apps.
The National Bureau of Statistics of the CPC previously released data on the price changes of residential properties in 70 large and medium-sized cities in May 2024. In May, the sale prices of second-hand homes in first-tier cities decreased by 9.3% year-on-year, with Beijing, Shanghai, Guangzhou, and Shenzhen dropping by 8.6%, 7.9%, 11.4%, and 9.2% respectively. The sale prices of second-hand homes in second and third-tier cities decreased by 7.5% and 7.3% respectively, with wider declines compared to the previous month.
It is worth noting that the second-hand housing price index of all 70 cities involved in the statistics decreased both monthly and annually. Among them, six cities, including Xuzhou, Xiamen, Guangzhou, Wuhan, Nanjing, and Wenzhou, led the decline, with drops of over 10% compared to May of the previous year.
In recent days, a financial and economic media personality in Beijing, known as “Ji Pangzi,” pointed out that the transaction prices of second-hand houses in Guilin are also no longer visible. So far, at least more than twenty cities in mainland China have closed the public display of second-hand house prices.
“In short, the cities that used to speculate aggressively and are now experiencing sharp declines, especially in first and second-tier cities, are no longer disclosing the transaction prices of second-hand houses. Why are they not disclosing this information? They are afraid. They don’t want you to know because if you see the prices, you might hesitate to make a purchase. Keeping the prices hidden leaves you clueless about how much the prices have dropped, preventing you from bargaining. This creates information asymmetry. In essence, not letting you know is just deliberately creating information asymmetry, isn’t it?” Ji Pangzi commented.
He pointed out that in the current second-hand housing market, a prevalent phenomenon is a bidding frenzy among buyers. Homebuyers attempt to negotiate prices further down from the lowest advertised prices.
He believes that hiding the transaction prices of second-hand houses is a childish and ineffective attempt at manipulation because the market will find a way out on its own.
Furthermore, in light of the escalated situation, the decision to shield prices has been interpreted by some media outlets as a measure for moderating the second-hand housing market.
Mr. Wang, a seasoned industry expert, stated, “With the increasing number of listings, consumer sentiment is cautious. Second-hand house buyers often use the lowest historical transaction price as a benchmark for negotiating with landlords, as everyone aims to purchase similar properties at the lowest possible prices.”
Mr. Wang explained that the disparity in selling prices of second-hand houses among landlords, even for the same property type within the same neighborhood, could be significant, reflecting the quality difference of the properties. When there is a large difference between the listing price and the historical lowest transaction price in the neighborhood, the bargaining period lengthens, delaying the transaction cycle and efficiency.
He added that aside from prolonged transaction cycles, in circumstances where the number of listed second-hand houses is high, if multiple owners in the same neighborhood list their properties concurrently, some sellers looking to sell quickly may lower their prices, prompting other sellers to follow suit, resulting in further declines in the average selling price, leading to a downturn in the market sentiment.
As indicated in a recent report by a local newspaper, as one of the cities that obscure the transaction prices of second-hand houses, the second-hand house market in Taiyuan shows a high degree of similarity to the national market. After checking several real estate agency apps, it was found that the transaction records of second-hand houses in Taiyuan were similarly void of price information. While the platform provides data on the average listing prices, new listings, and supply-demand ratio of popular neighborhoods over the past year, when users inquire about individual property transaction information, only basic details like area and layout are shown, while the crucial price-related information remains blank.
For instance, in a certain community on Shuangta West Street in the provincial capital, the average listing price in May was 18,782 yuan per square meter, with an average transaction price of 13,454 yuan per square meter. However, the “latest transaction brief” for an individual property only displayed basic information such as a 1-bedroom, 1-living room layout and a 58-square-meter area, leaving columns on price adjustments, transaction periods, transaction prices, and property viewing frequencies all blank. Clicking on “view all” redirected to a “recent transactions in the same community” page, which was also blank, providing no transaction prices while displaying an error message.
Another app yielded similar results, where users could view the previous month’s average listing and transaction prices for a neighborhood but found that historical transaction information for individual properties was more detailed compared to the former app, including listing prices, transaction periods, price adjustments, and viewing frequencies, yet only the transaction prices were tagged as “data not available.”
In this context, the decision to shield prices has been interpreted by some media outlets as a measure for appropriately regulating the second-hand housing market.
Mr. Wang emphasized, “With the constantly increasing number of listings, consumers are adopting a wait-and-see approach, where second-hand house buyers often take the lowest historical transaction price as the bottom line for negotiation with landlords, with everyone seeking to purchase similar properties at the lowest possible prices.”
Mr. Wang pointed out that the disparity in selling prices among landlords for second-hand houses of the same type within the same neighborhood could have a significant impact, as even properties with the same structure may vary greatly in quality. This disparity ultimately reflects on the landlords’ listing prices. When there is a substantial difference between this price and the neighborhood’s historical lowest transaction price, negotiation periods are prolonged, hampering the transaction cycle and efficiency.
He mentioned that besides extended transaction periods, in a situation of high second-hand house listings, if multiple owners within the same neighborhood list their properties simultaneously, some looking to sell quickly may decrease prices, pressuring other sellers to follow suit, leading to further decline in the average selling price and an overall pessimistic market trend.
A responsible staff member of a real estate agency in the capital city of Shanxi Province mentioned that the number of second-hand house listings in the province’s capital was close to 40,000 and continuously rising. The supply-demand relationship in the real estate market has undergone a shift. Except for a small number of listings with educational district advantages or those needing to sell urgently at a lower price, the listing periods for most properties are becoming increasingly extended.