Extreme shortage of supply seen in Shanghai's property market in August

SHANGHAI'S new housing market was plagued by an extreme shortage of supply in August while average cost jumped to a record amid structural shift.

The area of new residential properties sold, excluding government-subsidized affordable housing, dropped 32.4 percent from July to 454,000 square meters last month, Shanghai Centaline Property Consultants Co said in a report released today. That represented a year-on-year plunge of 75.7 percent and was the lowest August figure ever registered in the city.

"The city's new home market suffered from a severe shortage of supply for the entire month with only a little bit over 100,000 square meters of new housing units being released during the last seven days of August," said Lu Wenxi, senior manager of research at Centaline. "That's why weekly sales of new houses had been hovering around just 90,000 square meters for three consecutive weeks."

On the supply side, about 117,000 square meters of new residential properties were launched for sale last month around the city, a month-over-month dive of 74.8 percent. That was also the lowest monthly new home supply in Shanghai since January 2012, Centaline data showed.

Average cost of new homes, meanwhile, gained 6.6 percent from July to 48,971 yuan (US$7,421) per square meter, the highest monthly price of new homes ever recorded in Shanghai.

Among the 10 best-selling projects, two cost more than 70,000 yuan per square meter while average price of five other developments ranged between 30,000 yuan per square meter and 60,000 yuan per square meter, according to Centaline data.