Third-quarter home sales dented by tightening measures

Tightening policies continued to constrain residential property sales in Shanghai in the third quarter, with prices of new homes in the high-end segment remaining flat, international real estate consultancy JLL said in its latest report.

Citywide, some 2.2 million square meters of new homes, excluding government-subsidized affordable housing, were sold between July and September, an increase of 0.6 percent from the second quarter and down 6.5 percent from same period a year earlier, JLL's quarterly research showed.

New home supply during the three-month period fell 2.3 percent from the previous quarter to 2.1 million square meters, with most newly launched projects experiencing slow sales amid waning sentiment among home buyers.

In the high-end segment, however, new home sales jumped 27 percent quarter on quarter to 625 units, mainly due to increased new supplies, which stood at 1,174 units spanning six projects, according to JLL data. They sold for an average of 116,096 yuan (US$16,388) per square meter, almost unchanged from the previous quarter.

"Sales are likely to be subdued as far as tightening policies remain in place and we expect prices of new high-end homes to remain largely flat under strict price caps," said Stephenie Zhou, head of project sales for JLL Shanghai.

Between January and September, a total of 49,000 new home units, excluding government-subsidized affordable housing, were sold across the city, a year-on-year rise of 12 percent, a separate report released by Shanghai Homelink Real Estate Agency Co showed.

The average cost of a new home stood at 54,275 yuan per square meter during the nine-month period, a year-on-year increase of 8 percent.