Sluggish housing market prevails in Shanghai

Extremely sluggish sentiment among buyers took over Shanghai's new housing market again, terminating a two-week rally that pushed seven-day sales very close to the 100,000-square-meter threshold.

The area of new residential properties sold, excluding government-subsidized affordable housing, fell 14.2 percent to around 85,000 square meters last week, Shanghai Centaline Property Consultants Co. said in its weekly assessment today.

"Weekly transaction stayed below the 100,000-square-meter threshold for the ninth consecutive week with only Qingpu and Songjiang districts registering sales of more than 10,000 square meters," said Lu Wenxi, senior manager of research at Centaline. "Centrally located areas — for instance the former Jing'an and Huangpu districts — suffered zero sales due to long-term inadequate supply."

Citywide, not a single unit was released to the local market, following some 50,000 square meters' of supply launched during the previous week, Centaline data showed.

The average cost of new homes edged up 0.3 percent week on week to 49,752 yuan (US$7,514) per square meter, hovering around the 50,000-square-meter barrier for the sixth straight week.

All projects making it into the top 10 list cost more than 30,000 yuan per square meter, with three recording an average price of over 50,000 yuan.

An Evergrande project in outlying Songjiang continued to be the most sought-after development after unloading 3,838 square meters, or 21 units, for an average price of 34,949 yuan per square meter. A project in downtown Xuhui District, which cost 96,166 yuan per square meter, was the most expensive according to Centaline data.

Looking forward, slack sentiment will probably extend through the last few weeks of 2017 among both real estate developers and home buyers, industry analysts said.

For all of November, new residential property sales climbed 11.6 percent from October to 374,000 square meters across the city, Shanghai Homelink Real Estate Agency Co. said in an earlier report.

On a year-over-year basis, that represented a plunge of nearly 38 percent, making it the worst-performing November since 2011.

Around 2,800 units of new homes were sold last month, a month-over-month increase of 7.7 percent, and a year-over-year drop of 37.9 percent, Homelink data showed.