Shanghai's housing market suffers major setback

SHANGHAI'S new housing market suffered a major setback last week with a double-digit retreat in sales and zero supply.

The total area of new residential properties sold, excluding government-subsidized affordable housing, dropped 16.9 percent from the previous seven-day period to 94,000 square meters, after staying above the 100,000-square-meter threshold for just two weeks, Shanghai Centaline Property Consultants Co said in a report released today.

Citywide, the outlying Qingpu District outperformed all other areas with new home sales reaching some 16,000 square meters, a week-over-week increase of 23.1 percent, Centaline data showed.

"The city was plagued again by zero supply of new homes last week, which was really rare for September, a traditional month for robust property sales in China," said Lu Wenxi, senior manager of research at Centaline. "Market prospects have become dim as lack of supply probably suggests a shortage of confidence among real estate developers."

New home sales totaled only 220,000 square meters during the first half of this month, up just 30,000 square meters from the first 15 days of August, the traditional low season for property sales, Centaline data showed.

The new homes sold for 44,315 yuan (US$6,753) per square meter on average, a fall of 6.2 percent from the previous week and also the lowest weekly average registered in about two months.

In particular, half of the 10 most popular projects cost between 30,000 yuan per square meter and 40,000 yuan per square meter, and the most expensive development in the top 10 list cost just under 56,000 yuan per square meter.

A residential project in remote Lingang port area stood out as the most sought-after development after selling 44 units, or 8,670 square meters, for an average price of 27,287 yuan per square meter, according to data released today by Shanghai Homelink Real Estate Agency Co.