New home buying sentiment recovers in Shanghai for the second straight month in December

New home buying sentiment recovered in Shanghai for the second straight month in December with average cost rising again amid stable performance in the medium-end housing segment.

Around 467,000 square meters of new homes, excluding government-funded affordable housing, were sold across the city in December, a month-over-month increase of 24.9 percent, Shanghai Centaline Property Consultants Co said in a report released today. On an annual, that represented a drop of 28 percent.

The average price of the new homes rose 1.3 percent from November to 49,648 yuan (US$7,624) per square meter, a historic high in the city.

"Out of the 10 most popular projects, eight cost between 30,000 yuan per square meter and 60,000 yuan per square meter, suggesting continuing strong demand from first-time upgraders," said Lu Wenxi, senior manager of research at Shanghai Centaline. "That was also true on the supply side as a majority of the new homes launched last month cost  between 30,000 yuan per square meter and 50,000 yuan per square meter."

Some 226,000 square meters of new houses were released locally last month, a surge of 343 percent from November, according to Centaline data.

"It seemed no surprise that we didn't see a notable rebound in sales during the last month of 2017 as the central government had been reiterating that tightening policies to rein in speculation would remain strictly enforced in key cities through 2018," Lu said. "A recovery should not be anticipated until March because the first two months are traditional low season for property sales."