New home sales in Shanghai fall sharply on lackluster sentiment

New home market off to a weak start in August

Sales of new houses in Shanghai fell notably in the first week of August, which also saw no single project launched.

The area of new homes sold, excluding government-subsidized affordable housing, dropped 30.4 percent to 108,000 square meters during the seven-day period ended Sunday, after hovering around 150,000 square meters for three consecutive weeks, Shanghai Centaline Property Consultants Co said in a report released today.

The city's outlying Qingpu District led with weekly transactions of 17,000 square meters, followed by Songjiang and Jiading districts which both sold around 12,000 square meters.

These new houses sold for an average 52,154 yuan (US$7,736) per square meter, a week-over-week gain of 8.3 percent, Centaline data showed.

"It was rare that three of the 10 most popular projects cost more than 70,000 yuan per square meter, with two of them even above the 100,000-yuan-per-square-meter threshold," said Lu Wenxi, senior analyst at Centaline.

But still "no single development managed to record weekly sales of over 100 units, evidence of a really lackluster sentiment among home buyers," Lu said.

One project in remote Fengxian District became the most sought-after development after selling 70 apartments totaling 5,903 square meters for an average price of below 33,000 yuan per square meter. A Yanlord Land development in Pudong New Area sold 17 units for an average of 107,315 yuan per square meter, and a Shui On Land project in Hongkou District sold 11 apartments for an average of 110,799 yuan per square meter, both making into the Top 10 list, Centaline data showed.

Meanwhile, no new project was launched locally last week unlike the previous seven-day period which saw the release of 49,000 square meters of new supply.

Lu predicted that weakness will linger across the city over the next few weeks.