New home sales rebound thanks to suburban areas

Sales of new homes rebounded moderately in Shanghai last week, with suburban areas remaining the major driving force due to rather ample supply, the latest market data showed.

The area of new residential properties sold, excluding government-subsidized affordable housing, rose 18 percent to 82,000 square meters during the seven-day period ending on Sunday, Shanghai Centaline Property Consultants Co said in a report released today.

Around the city, outlying Qingpu District reclaimed its No.1 position with transactions reaching 24,000 square meters, a week-over-week increase of 71.4 percent. Jiading followed with some 15,000 square meters sold, while Nanhui in Pudong New Area also maintained over 10,000 square meters of new home transactions.

The average cost of new residential property climbed 3.4 percent from the previous week to 49,123 yuan (US$7,617) per square meter, according to Centaline data.

"Notably, three out of the 10 most sought-after projects cost less than 30,000 yuan per square meter, a comparatively high proportion if we looked at the past few weeks," said Lu Wenxi, senior manager of research at Shanghai Centaline. "That also seemed consistent with new supply."

Citywide, a residential project in Qingpu sold 13,911 square meters, or 148 units, of new homes for an average price of 39,131 yuan per square meter, making it the most popular development last week. A development in Jiading's Nanxiang, which cost 46,3017 yuan per square meter on average, trailed closely after selling 10,199 square meters, or 112 units, during the seven-day period.

On the supply side, about 86,000 square meters of new houses spanning six projects, all of which bore a price tag of no more than 50,000 yuan per square meter, were released to the local market last week -- a surge of 174 percent from the previous week, Centaline data showed.

"In the second half of this month, at least five projects are set to launch a total of some 2,000 units into the local market which will therefore push overall new home supply in January to exceed 3,000 units, probably the highest monthly figure since August last year," Zhang Yue, chief analyst with Shanghai Homelink Real Estate Agency Co said. "Moreover, since over 80 percent of this new supply will be units no larger than 120 square meters, we expect to see continually improving sentiment among home seekers through the end of this month."