Sales of pre-owned homes rise in Shanghai last month but still below the 20,000-unit level

SALES of pre-occupied homes climbed moderately in Shanghai last month but were still below the 20,000-unit level, while prices remained generally stable.

Around 11,600 pre-owned homes changed hands in November, a month-on-month gain of 7.7 percent, according to data released today by Shanghai Centaline Property Consultants Co. But the gain represented a plunge of 42.4 percent year on year.

"The figure was still far below the 20,000-unit threshold that is often viewed as a normal monthly volume for the city," said Lu Wenxi, senior manager of research at Shanghai Centaline. "As sentiment among home seekers continued to be sluggish, we are beginning to see larger price discounts, like a 10 percent cut offered by some owners of properties that cost more than 10 million yuan (US$1.5 million) which was quite rare a few months ago."

Meanwhile, the city's existing housing index, which tracks month-over-month price changes in 130 areas citywide, added 0.11 percent from October to 3,996 in November, Shanghai Existing House Index Office said in a separate report released today.

Prices of pre-owned homes rose in 55 areas, fell in 43 areas and were flat in 32 areas.

Most notable price gains were recorded in centrally-located districts near to city center, with smaller increases seen in  emerging areas, the report said. But it added that prices of pre-owned homes in remote areas fell on average.

"Monthly transactions of existing homes have been staying above 10,000 units since March, probably an indication that the market has hit its bottom already," the office said. "We expect small fluctuations in prices to extend through the end of this year because transactions shall remain weak as there are no signs tightening policies will be eased."

The city's outlying Jinshan New Town led with sales of 267 units of pre-owned homes last month followed by Minhang District's Pujiang where 260 units were sold and Sanlin in Pudong New Area with 249 units sold.

The city saw a 11.2 percent drop in inventory of pre-occupied homes available for sale from October to 132,664 units by the end of November, according to data compiled by the office. That was both the lowest month-end figure and the sharpest decline recorded this year.