New home sales drop on weak buying sentiment

New home sales hovered around 150,000 square meters for the third straight week in Shanghai as subdued buying sentiment continued to linger, latest market data suggest.

The area of new homes sold, excluding government-subsidized affordable housing, dipped 0.3 percent to 156,000 square meters last week, Shanghai Centaline Property Consultants Co said in a report released yesterday.

Despite a drop of 15.4 percent from the previous week, the city’s outlying Baoshan District again topped the largest seven-day volume when 33,000 square meters of new houses were sold. Remote Jiading District posted weekly transactions of 25,000 square meters.

“Transaction volume often picks up at the end of a month but that didn’t happen this time,” said Lu Wenxi, senior manager of research at Centaline. “August could be another tough month as supply almost stagnated.”

One project launched in Baoshan last week added 49,000 square meters to the local inventory, a weekly surge of 75.2 percent. It was the third straight week that new home supply stayed below 100,000 square meters, according to Centaline data.

House supply totaled 464,200 square meters, down from June’s 620,300 square meters, a separate report released yesterday by Shanghai Homelink Real Estate Agency Co showed.

The average cost of new homes gained 7.8 percent to 48,148 yuan (US$7,133) per square meter, mainly boosted by a development in Baoshan where 214 apartments were sold for above 55,000 yuan per square meter during the seven-day period. No other project managed to sell more than 100 units weekly.