The downturn in Shanghai’s property market is forecast to continue as an increasing number of wealthy homeowners are planning to leave mainland China.

At the end of last month, around 135,400 pre-owned flats were on the market, a 7.8% rise from the month before, as per statistics from the local housing administration bureau.

Based on local property brokers’ public information, this figure was almost 30% higher than at the end of last year, South China Morning Post reports.

“An increasing number of wealthy people are looking to offload their property assets as they bet a downturn of the local home market will continue,” according to Song Yulin, a senior manager with property agency 5I5J. “Most of them are either considering migration or planning to allocate part of their assets overseas.”

Bearish sentiment has intensified within Shanghai’s property market with the increasing number of pre-owned properties up for sale. Fears are rising that a key policy shift after President Xi Jinping secured a third term as leader would eat into people’s savings. The so-called ‘common prosperity’ tax intends to reduce the wealth gap and limit private wealth accumulation.

The National Bureau of Statistics said prices of pre-owned homes in Shanghai declined 0.4% in October from September. This marks the first month-on-month fall since November last year.

Owners are reducing asking prices by as much as 10% in order to attract buyers. Rental prices are also declining, by up to 20%, as an increasing number of expats departed as the zero-Covid policy continued.

However, a relaxing of restrictions may eventually curb the slump in the city’s housing market, says Sam Xie, head of research at CBRE China: “Foreign company executives and businesspeople will eventually return,” he said. “Buying interest [in second-hand homes] and home rental demand will recover by then.”