Shanghai's home sales continue to drop

Shanghai’s new home sales retreated last week, leaving prospects clouded as the market struggles to get out of the doldrums.

The area of new homes sold, excluding government-subsidized affordable housing, dropped 23.7 percent to about 113,000 square meters during the seven days to Sunday, Shanghai Centaline Property Consultants Co said on Monday.

Baoshan District outperformed all others with weekly sales of new houses reaching about 40,000 square meters, mainly boosted by comparatively ample supply. Qingpu and Jiading followed with seven-day volume hitting 13,000 square meters and 12,000 square meters, respectively.

“Two projects registered weekly sales of more than 100 units, a positive sign for somewhat stabilized sentiment among home buyers,” said Lu Wenxi, senior manager of research at Centaline.

“On the developers’ side, companies also picked up their pace in releasing new homes to the market, as they are getting accustomed to the new lottery-like registration system used to decide buyers’ purchasing orders.”

Two projects released new residential units to the local market last week, adding a total of 65,000 square meters of new homes to the city’s inventory, Centaline data showed.

New houses sold for an average 47,260 yuan (US$7,245) per square meter last week, up 3.6 percent from the previous seven-day period, Centaline said. Six of the 10 best-selling projects cost 40,000-60,000 yuan per square meter.

A development in Zhangmiao in Baoshan sold 180 units, or 18,375 square meters in total, for an average 54,838 yuan per square meter, making it the most sought-after project of the week. It was closely trailed by another in Yanghang in the same district, where 144 units, or 14,191 square meters, sold for an average 37,106 yuan per square meter.

The two projects used a lottery-like registration system to choose buyers, as the city government stepped up efforts to protect the rights and interests of home buyers as well as crack down on illegal sales in the real estate market.

Shanghai in July published guidelines that involve bids running through lottery software provided by authorized notaries in the city, with results published immediately after the draw.