Sales of new homes sluggish in Shanghai

Shanghai saw transactions of new homes stay below the 100,000 square meter threshold during the past seven days for the fifth straight week while sentiment among real estate developers and buyers continued to be lackluster, according to latest market data.

The area of new homes sold, excluding government-subsidized affordable housing, fell 1.5 percent to around 96,000 square meters last week, Shanghai Centaline Property Consultants Co said in a report released today.

Nanhui in the city's Pudong New Area registered weekly sales of 17,000 square meters while outlying Qingpu District sold some 16,000 square meters.

"There is still no sign for a recovery in buyers' momentum as the most popular project only recorded sales of 77 units," said Lu Wenxi, senior manager of research at Centaline. "Moreover, not a single unit was released to the market for sale, making it the fourth week since October with zero new supply."

These new homes sold for an average 49,515 yuan (US$7,448) per square meter, a week-over-week dip of 1.5 percent, according to Centaline data.  

A development in remote Nanhui became the most sought-after project selling 6,907 square meters at 33,600 yuan per square meter on average. Another project in the same area sold 4,165 square meters of new homes at an average of 46,223 yuan per square meter.

Notably, two luxury projects with an average price of more than 100,000 yuan per square meter also made into last week's Top 10 list, despite the fact that each of them just managed to sell 10 units only.

Analysts predicted that as new home supply has been extremely insufficient over the past month, sales in the market are not expected to rebound significantly in the last two months of the year as rein-in policies remained strictly enforced.