Sentiment rises after recovery in Shanghai's real estate market

Home buyers and real estate developers' hopes were raised last week following a recovery in the market after the Spring Festival holiday.

The area of new homes sold, excluding government-subsidized affordable housing, jumped 175.2 percent from the previous week to about 71,000 square meters during the seven-day period ending on Sunday, according to a report released today by Shanghai Centaline Property Consultants Co.

The city's outlying Jiading District transacted around 16,000 square meters of new homes last week. It was closely trailed by the remote districts of Chongming and Qingpu, where sales both stayed below the 10,000-square-meter threshold.

"The market seemed to be well on its track to recover and we can expect a major rebound in both sales and supply this month if momentum is maintained," said Lu Wenxi, senior manager of research at Centaline. "On the policy side, we don't anticipate further tightening at least in the near term."

The average cost of the new homes rose 15 percent week on week to 44,423 yuan (US$7,010) per square meter, Centaline data showed.

Last week's top four best-selling projects all sold for under 40,000 yuan per square meter and only one out of the 10 most popular developments cost over 50,000 yuan per square meter.

A residential project developed by Tahoe Group on Changxing Island in Chongming District remained the most sought-after development after selling 8,242 square meters, or 75 units, for an average 30,437 yuan per square meter.

Meanwhile, 75,000 square meters of new houses spanning two projects were launched for sale last week, a weekly jump of 57.4 percent, according to Centaline data.

One of them, located in Anting, Jiading District, released 41,000 square meters at an average 37,000 yuan per square meter.

Residential projects located beyond the city's Outer Ring Road have been dominant in the city's new home market, taking up 92 percent of total new home sales and 97 percent of supply so far this year, according to Shanghai Homelink Real Estate Agency Co data.